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OTC Markets Group Inc (OTCM)
OTHER OTC:OTCM
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OTC Markets Group
(OTC:OTCM)
71Outperform
OTC Markets Group (OTCM) vs. S&P 500 (SPY)
Market Cap
$559.84M
Dividend Yield1.54%
Average Volume (3M)4.91K
Price to Earnings (P/E)20.7
Beta (1Y)0.12
Revenue Growth0.61%
EPS Growth-7.75%
CountryUS
Employees134
SectorFinancial
Sector Strength85
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)2.26
Shares Outstanding11,975,122
10 Day Avg. Volume3,256
30 Day Avg. Volume4,907
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.39
Price to Cash Flow (P/CF)8.20
P/FCF Ratio8.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
OTC Markets Group Business Overview & Revenue Model
Company DescriptionOTC Markets Group (OTCM) is a financial market providing price and liquidity information for over-the-counter (OTC) securities. The company operates financial marketplaces for a diverse range of securities, including equities, corporate bonds, government securities, and ADRs (American Depositary Receipts). OTC Markets Group enables investors to trade securities through three main marketplaces: OTCQX, OTCQB, and Pink, each catering to different types of companies and investor needs. These platforms aim to provide transparency, efficient trading, and reliable information for various securities.
How the Company Makes MoneyOTC Markets Group generates revenue through a combination of listing fees, market data licensing, and trading services. Companies pay fees to list their securities on one of OTCM's marketplaces, with the OTCQX and OTCQB markets requiring annual fees for maintaining listings. Additionally, OTC Markets Group earns income by licensing its market data to financial institutions, traders, and investors who require access to trading data, pricing, and other market-related information. The company also benefits from transaction fees and other trading-related services, leveraging its role as a critical platform for OTC securities trading. Partnerships with broker-dealers and financial firms further enhance its revenue streams by expanding its reach and integration within the financial ecosystem.
OTC Markets Group Financial Statement Overview
Summary
OTC Markets Group demonstrates strong financial performance with high profitability, a robust balance sheet, and efficient cash flow management. Despite modest revenue growth and a slight decline from peak revenues, the company maintains a stable financial position with low leverage and high returns on equity.Income Statement
OTC Markets Group demonstrates strong profitability with a high gross profit margin of 47.6% and a solid net profit margin of 26.3% for TTM. Revenue growth has been modest, with a slight increase of 2.2% year-over-year, indicating stable income performance. The EBIT margin stands at 31.2%, reflecting efficient operational management. However, the decline from the peak revenue in 2022 suggests a need for renewed growth strategies.78
Positive
Balance Sheet
The company's balance sheet is robust, reflecting a low debt-to-equity ratio of 0.27, indicating prudent financial leverage. The return on equity is substantial at 57.4%, showcasing strong profitability relative to equity. An equity ratio of 52.1% points to a solid capital structure, though the recent increase in stockholders' equity has been significant. These factors highlight financial stability and resilience.82
Very Positive
Cash Flow
OTC Markets Group displays a healthy cash flow position with a high operating cash flow to net income ratio of 1.19, indicating strong cash conversion. The free cash flow growth rate is slightly negative at -2.4%, a result of lower capital expenditures. The free cash flow to net income ratio is robust at 1.13, underscoring efficient cash utilization. These metrics suggest strong cash flow management and potential for future investments.85
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 103.37M | 101.13M | 105.15M | 99.91M | 68.42M | 60.35M | Gross Profit |
| 49.21M | 49.91M | 58.62M | 56.59M | 36.50M | 32.61M | EBIT |
| 32.25M | 32.59M | 36.82M | 38.02M | 21.43M | 17.88M | EBITDA |
| 35.00M | 35.06M | 38.91M | 39.81M | 23.20M | 19.37M | Net Income Common Stockholders |
| 27.15M | 27.05M | 30.81M | 30.48M | 18.27M | 14.94M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 28.81M | 37.72M | 37.37M | 50.39M | 33.73M | 28.22M | Total Assets |
| 41.65M | 90.53M | 89.62M | 82.25M | 64.81M | 60.35M | Total Debt |
| 0.00 | 13.95M | 15.24M | 16.46M | 16.29M | 17.47M | Net Debt |
| -28.81M | -20.15M | -22.13M | -33.94M | -17.44M | -10.75M | Total Liabilities |
| 25.24M | 58.30M | 59.81M | 57.30M | 45.26M | 42.68M | Stockholders Equity |
| 16.41M | 32.23M | 29.80M | 24.95M | 19.55M | 17.67M |
| Cash Flow | Free Cash Flow | ||||
| 30.71M | 31.47M | 32.24M | 45.06M | 24.98M | 16.56M | Operating Cash Flow |
| 32.18M | 33.04M | 33.68M | 46.46M | 26.01M | 21.41M | Investing Cash Flow |
| -3.78M | -5.19M | -16.39M | -1.40M | -1.03M | -5.52M | Financing Cash Flow |
| -30.15M | -31.10M | -30.31M | -28.40M | -19.46M | -16.65M |
OTC Markets Group Technical Analysis
Negative
46.53
Price Trends
49.72
Negative
50.84
Negative
48.84
Negative
Market Momentum
-0.84
Negative
40.39
Neutral
43.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTCM, the sentiment is Negative. The current price of 46.53 is below the 20-day moving average (MA) of 47.37, below the 50-day MA of 49.72, and below the 200-day MA of 48.84, indicating a bearish trend. The MACD of -0.84 indicates Negative momentum. The RSI at 40.39 is Neutral, neither overbought nor oversold. The STOCH value of 43.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OTCM.
OTC Markets Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $96.71B | 27.75 | 13.26% | 3.91% | 9.88% | 9.18% | |
79 Outperform | $23.64B | 31.30 | 18.42% | 1.08% | 8.51% | 1.13% | |
77 Outperform | $96.27B | 35.05 | 10.32% | 1.09% | 15.32% | 14.02% | |
73 Outperform | $8.15B | 29.70 | 20.45% | 1.38% | 9.06% | 6.10% | |
72 Outperform | $42.44B | 38.26 | 10.15% | 1.30% | 21.96% | -8.37% | |
71 Outperform | $559.84M | 20.66 | 78.87% | 1.54% | 0.61% | -7.75% | |
63 Neutral | $14.39B | 9.81 | 8.95% | 4.37% | 16.38% | -11.64% |
* Financial Sector Average
Performance Comparison
OTCM
OTC Markets Group
46.53
-4.91
-9.55%
CBOE
Cboe Global Markets
215.09
36.34
20.33%
CME
CME Group
254.46
52.72
26.13%
ICE
Intercontinental Exchange
156.74
20.49
15.04%
MKTX
Marketaxess Holdings
212.94
-9.46
-4.25%
NDAQ
Nasdaq
68.25
7.05
11.52%
OTC Markets Group Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -3.80% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a record revenue achievement and promising initiatives like overnight trading, but it also pointed out several challenges such as declining corporate services revenue and increased operating expenses. While there is strong growth in OTC Link and a positive outlook on regulatory engagement, the subscriber decline and flat market data revenue balance the sentiment.Highlights
Record Revenue Achievement
OTC Markets Group achieved over $111 million in annual revenues for the first time, marking a 1% increase compared to 2023.
Growth in OTC Link Business
OTC Link's revenues increased by 14% year-over-year, driven by a 21% increase in revenues from OTC Link ECN and NQB, and a 16% increase in revenues from ATS messages.
Overnight Trading Initiative
OTC Markets is launching OTC Overnight and Moon ATS for trading in OTC and exchange-listed securities, providing access during Asian market hours and European market open.
Dividend Declaration
The Board of Directors declared a quarterly dividend of $0.18 per share, reflecting the company's commitment to shareholder returns.
Positive Retention Rates
Retention rate for OTCQX subscription period beginning January 1, 2025, achieved a 96% retention rate, up from 93% in the previous year.
Lowlights
Decrease in Corporate Services Revenue
Corporate services revenues decreased by 4% for the year, with a flat revenue from OTCQX and decreases of 5% and 7% in OTCQB and DNS revenues.
Subscriber Decline in Corporate Services
OTCQX and OTCQB saw declines in the number of companies, with OTCQX down 6% and OTCQB down 8% at the end of the quarter.
Flat Market Data Licensing Revenue
Market data licensing business saw only a modest 1% growth year-over-year, with a decline of 10% in non-pro user revenue.
Increased Operating Expenses
Operating expenses increased by 1% for the year, driven by a 7% increase in compensation and benefits and a 16% increase in IT infrastructure costs.
Company Guidance
The guidance provided during the OTC Markets Group Fourth Quarter and Full Year 2024 Earnings Conference Call highlighted several key metrics and strategic priorities. The company reported a slight increase in both gross and net revenues, achieving over $111 million in annual revenues for the first time, with a notable 33% growth in OTC Link's revenues. The market data licensing business remained flat, while corporate services saw a 6% decrease in revenue. Operating expenses grew by approximately 1%, and the company maintained a 1% increase in adjusted EBITDA, amounting to $41.3 million. In 2025, the company plans to focus on two major projects: the launch of OTC Overnight, enabling trading from 8 pm to 4 am Eastern Time, and the development of the OTCID basic reporting market, set to launch on July 1, 2025. Additionally, the company declared a quarterly dividend of $0.18 per share, demonstrating its commitment to shareholder returns.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.