Tucows, Inc.: Leads amongst peers with strong fundamentals

Tucows, Inc. relative valuation is OVERVALUED and it has a fundamental analysis score of 81.

Our analysis is based on comparing Tucows, Inc. with the following peers – Web.com Group, Inc., Leaf Group Ltd., Bridgeline Digital, Inc., Wix.com Ltd., Innodata Inc., VeriSign, Inc. and Synacor, Inc. (WEB-US, LFGR-US, BLIN-US, WIX-US, INOD-US, VRSN-US and SYNC-US).

Tucows, Inc. has shown good performance overall, both over the last one year (at 114.34%) as well as over the last month (at 6.67%). Share price performance over the last month, though has been lower than that over the last year. But Tucows, Inc.’s stock has done better than its overall peer group whose performance was -5.62% over the last month.

Company Snapshot

  • Considering peers, relative outperformance over the last year and the last month suggest a leading position.
  • It currently trades at a Price/Book ratio of (13.51).
  • TCX-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • TCX-US has relatively high profit margins while operating with median asset turns.
  • Compared with its chosen peers, changes in the company’s annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale.
  • TCX-US‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s median gross margin and relatively high pre-tax margins suggest non-differentiated product portfolio but with tight cost control relative to peers.
  • While TCX-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • TCX-US has the financial and operating capacity to borrow quickly.
  • Our analysis rates Tucows, Inc. as OVERVALUED relative to its peers.

Share Price Performance

Considering peers, relative outperformance over the last year and the last month suggest a leading position.

TCX-US‘s share price performance of 114.34% over the last 12 months is above peer median of 26.98%. The 30-day trend in its share price performance of 6.67% is also above the peer median of -5.62% suggesting that this company is a leading performer relative to its peers.

Share Price Performance

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Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

Tucows, Inc.’s price of USD 59.20 is greater than CapitalCube’s implied price of USD 41.12. At this level, CapitalCube believes that Tucows, Inc. is overvalued. Over the last 52 week period, the stock has fluctuated between USD 25.78 and USD 63.20.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

Tucows, Inc. is an Internet services company, which engages in the provision of domain names, email, and other services. It operates through the Domain Services and Network Access Services segments. The Domain Services segment includes wholesale and retail domain name registration services; value added services; and portfolio services. The Network Access Services sells retail mobile phones and services to individuals and small businesses through the Ting website. It also offers services under four brands: OpenSRS, YummyNames, Hover, and Ting. The company was founded in 1993 and is headquartered in Toronto, Canada.

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