Tucows (TCX) vs. Its Peers Critical Analysis

Tucows (NASDAQ:TCX) is one of 271 public companies in the “IT Services” industry, but how does it compare to its peers? We will compare Tucows to related businesses based on the strength of its profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Tucows and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tucows	1	0	0	0	1.00
Tucows Competitors	1992	5654	9471	342	2.47

As a group, “IT Services” companies have a potential upside of 30.31%. Given Tucows’ peers stronger consensus rating and higher probable upside, analysts plainly believe Tucows has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares Tucows and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Tucows	$390.30 million	-$75.82 million	-1.69
Tucows Competitors	$3.24 billion	$227.67 million	-23.83

Tucows’ peers have higher revenue and earnings than Tucows. Tucows is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional and Insider Ownership

73.6% of Tucows shares are owned by institutional investors. Comparatively, 36.7% of shares of all “IT Services” companies are owned by institutional investors. 8.4% of Tucows shares are owned by insiders. Comparatively, 20.4% of shares of all “IT Services” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Tucows and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tucows	-21.20%	N/A	-9.48%
Tucows Competitors	-191.23%	-32.13%	-8.65%

Volatility and Risk

Tucows has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Tucows’ peers have a beta of 2.15, meaning that their average stock price is 115% more volatile than the S&P 500.

Summary

Tucows peers beat Tucows on 9 of the 13 factors compared.

Tucows Company Profile

Tucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in North America and Europe. It operates in three segments: Ting, Wavelo and Tucows Domains. The Ting segment provides fiber and fixed wireless internet services. The Wavelo segment offers individual developer tools, subscription, billing management, network orchestration, and provisioning services. This segment also provides billing solutions under Platypus brand. The Tucows Domains segment offers name registration, as well as value added services under OpenSRS, eNom, Ascio, EPAG, and Hover brands. The company was formerly known as Infonautics, Inc. and changed its name to Tucows Inc. in August 2001. Tucows Inc. was incorporated in 1992 and is headquartered in Toronto, Canada.