Capitalcube gives Tucows, Inc. a 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 a fundamental score of 81 and has a relative valuation of OVERVALUED.
Access our research and ratings on Tucows, Inc.
- Compared to peers, relative outperformance over the last year has faded more recently.
- It currently trades at a Price/Book ratio of (11.97).
- 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.
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Leverage & Liquidity
TCX-US has the financial and operating capacity to borrow quickly.
- With debt at a relatively low 13.52% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 8.73%), and a well-cushioned interest coverage level of 11.14x, TCX-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
- Of the 7 chosen peers for the company, only 6 of the stocks have an outstanding debt balance. Companies with no debt include LFGR-US.
TCX-US has maintained its Quick & Able profile from the recent year-end.
- TCX-US‘s interest coverage is its lowest relative to the last five years and compares to a high of 130.48x in 2015.
- The decrease in its interest coverage to 11.14x from 57.79x (in 2016) was also accompanied by a decrease in its peer median during this period to -23.24x from -0.45x.
- Interest coverage fell 23.86 points relative to peers. It is also above the 2.50x coverage benchmark unlike the peer median.
- TCX-US‘s debt-EV is its highest relative to the last five years and compares to a low of 0% in 2014.
- The increase in its debt-EV to 13.52% from 2.79% (in 2016) was also accompanied by an increase in its peer median during this period to 8.73% from 5.35%.
- Relative to peers, debt-EV rose 7.35 percentage points (and is now higher than its peer median).
Access the detailed analysis for Tucows, Inc.
Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|Web.com Group, Inc.||33.72||0.21||2.67||24.27|
|Leaf Group Ltd.||0||2.58||-6940.6||999|
|Bridgeline Digital, Inc.||17.61||1.12||-8.04||-25.05|
|Best In Class||0.04||2.58||11.14||999|
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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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