Tucows Inc. Fundamental Analysis (TSX: TC.TO)
Tucows Inc. (TSX: TC.TO) shows moderate financial fundamentals with a PE ratio of -1.78, profit margin of -21.20%, and ROE of 48.46%. The company generates $0.4B in annual revenue with moderate year-over-year growth of 7.74%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 66.8/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze TC.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakTC.TO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentTC.TO trades at attractive valuation levels.
Growth Score
ExcellentTC.TO delivers strong and consistent growth momentum.
Financial Health Score
ModerateTC.TO shows balanced financial health with some risks.
Profitability Score
WeakTC.TO struggles to sustain strong margins.
Key Financial Metrics
Is TC.TO Expensive or Cheap?
P/E Ratio
TC.TO trades at -1.78 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, TC.TO's PEG of -0.26 indicates potential undervaluation.
Price to Book
The market values Tucows Inc. at -0.74 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -4.08 times EBITDA. This is generally considered low.
How Well Does TC.TO Make Money?
Net Profit Margin
For every $100 in sales, Tucows Inc. keeps $-21.20 as profit after all expenses.
Operating Margin
Core operations generate -4.79 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $48.46 in profit for every $100 of shareholder equity.
ROA
Tucows Inc. generates $-11.49 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Tucows Inc. generates limited operating cash flow of $4.39M, signaling weaker underlying cash strength.
Free Cash Flow
Tucows Inc. generates weak or negative free cash flow of $-14.44M, restricting financial flexibility.
FCF Per Share
Each share generates $-1.29 in free cash annually.
FCF Yield
TC.TO converts -9.55% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-1.78
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.26
vs 25 benchmark
P/B Ratio
Price to book value ratio
-0.74
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.38
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-3.55
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.28
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.48
vs 25 benchmark
ROA
Return on assets percentage
-0.11
vs 25 benchmark
ROCE
Return on capital employed
-0.05
vs 25 benchmark
How TC.TO Stacks Against Its Sector Peers
| Metric | TC.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -1.78 | 32.17 | Better (Cheaper) |
| ROE | 48.46% | 766.00% | Weak |
| Net Margin | -21.20% | -6542.00% (disorted) | Weak |
| Debt/Equity | -3.55 | 0.58 | Strong (Low Leverage) |
| Current Ratio | 0.28 | 12.19 | Weak Liquidity |
| ROA | -11.49% | -1256.00% (disorted) | Weak |
TC.TO outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Tucows Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
20.01%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-1356.26%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
-115.27%
Industry Style: Growth, Innovation, High Beta
Declining