OTC Markets Group (OTCM) AI Stock Analysis

• Market Cap: $598.04M
• Dividend Yield: 1.44%
• Average Volume (3M): 6.40K
• Price to Earnings (P/E): 21.6
• Beta (1Y): 0.14
• Revenue Growth: 6.23%
• EPS Growth: 2.86%
• Country: US
• Employees: 134
• Sector: Financial
• Sector Strength: 73
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 0.92
• Shares Outstanding: 11,975,122
• 10 Day Avg. Volume: 4,706
• 30 Day Avg. Volume: 6,404
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 5.94
• Enterprise Value/Gross Profit: 11.48
• Enterprise Value/Ebitda: 18.07
• 1Y Price Target: $56.00
• Price Target Upside: 12.13% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 69 Neutral
• Price Target: $56.00 ▲(12.13% Upside)

OTC Markets Group's overall stock score is driven by strong financial performance and positive earnings call sentiment. However, technical analysis indicates bearish momentum, and the valuation suggests potential overvaluation. These factors collectively result in a moderate overall score.

Positive Factors

Revenue Growth

The consistent revenue growth across various segments indicates strong market demand and effective business strategies, supporting long-term financial health.

Product Expansion

The launch of the OTCID basic market enhances product offerings, potentially attracting more companies and investors, thus strengthening market position.

Cash Flow Generation

Robust cash flow generation indicates efficient operations and provides the company with the flexibility to invest in growth opportunities and return value to shareholders.

Negative Factors

Increased Expenses

Rising transaction-based expenses can pressure profit margins, potentially impacting long-term profitability if not managed effectively.

Profit Margin Decline

A decline in operating profit margin suggests challenges in cost management, which could affect the company's ability to sustain profitability over time.

Reliance on Debt

Moderate reliance on debt can limit financial flexibility and increase risk, especially if interest rates rise or cash flow generation weakens.

OTC Markets Group Business Overview & Revenue Model

Company Description

OTC Markets Group Inc. engages in the financial market business in the United States and internationally. It offers OTC Link Alternative Trading System, an interdealer quotation and trade messaging system; OTC Dealer, a real-time, front-end application that provides consolidated quotation, trading, and information system to attract and access market liquidity; OTC FIX, which uses the industry standard FIX protocol for quote submission, trading, and routing of execution reports; and OTC Link Electronic Communication Networks (ECN) and OTC Link National Quotation Bureau (NQB) that acts as the executing party on an agency basis in relation to transactions executed on platforms. The company also provides OTC Markets Real-Time Data products that provides quote, trade, and reference data for OTC Link ATS; OTC Markets Pricing and Reference Data products for detailed view into the securities and issuers within the OTC market; and compliance data products. In addition, it offers OTC Disclosure & News Service for publishing and distributing data, news, and financials; Real-Time Level 2 Quote Display, a service that companies sponsor to provide their investors with access to real-time level 2 quotes on otcmarkets.com and the issuer's Website; Blue Sky Monitoring Service for analysis, review, and guidance about a company's compliance with the United States securities laws; and Virtual Investor Conferences, which allows issuers to communicate and engages with investors, as well as operates the OTCQX Best Market, OTCQB Venture Market, and Pink Open Market. Further, it offers software, and risk and performance analytics tools for the banking and finance industries; online capital raising solutions; and OTCIQ, an investor relations portal. The company was formerly known as Pink OTC Markets Inc. and changed its name to OTC Markets Group Inc. in January 2011. OTC Markets Group Inc. was founded in 1904 and is headquartered in New York, New York.

How the Company Makes Money

OTC Markets Group generates revenue through multiple streams including transaction fees from trades executed on its platforms, subscription fees from companies seeking to be listed and maintain their status on its marketplaces, and fees for market data services provided to brokers and investors. The company also earns revenue from advertising and sponsorships on its websites. Key partnerships with broker-dealers and financial institutions enhance its trading volume, thereby contributing to its earnings through increased transaction fees.

OTC Markets Group Financial Statement Overview

Summary

OTC Markets Group demonstrates strong financial performance with robust profitability, a stable balance sheet, and excellent cash flow generation. The income statement shows healthy revenue growth and profitability, although slight margin compression is noted. The balance sheet is solid with conservative leverage and impressive return on equity, despite a decrease in stockholders' equity. Cash flow analysis is particularly strong, highlighting effective cash management and financial flexibility.

Income Statement

The income statement reflects strong profitability with a steady gross profit margin around 51.7% and a robust net profit margin of 25.3% for TTM. Revenue growth is moderate at 7.2% from the previous period, indicating healthy expansion, while stability is highlighted by consistent EBIT and EBITDA margins. However, declining EBIT and EBITDA margins from prior years could signal slight operational cost pressures.

Balance Sheet

The balance sheet is solid with a debt-to-equity ratio of 0.31, indicating conservative leverage. The equity ratio stands at 44.7%, showing a balanced capital structure. Return on equity is impressive at 71.4%, reflecting efficient use of shareholder funds. The high cash position relative to debt further strengthens financial stability, although a decrease in stockholders' equity from the previous year is a point to monitor.

Cash Flow

Cash flow analysis is robust, with a strong free cash flow to net income ratio exceeding 100%, indicating excellent cash generation relative to profits. Operating cash flow to net income ratio is similarly strong at 1.2 times. Free cash flow growth is steady, showcasing effective cash management. The company’s ability to cover capital expenditures comfortably enhances its financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	108.54M	101.23M	101.13M	105.15M	99.91M	68.42M
Gross Profit	56.13M	57.11M	49.91M	58.62M	56.59M	36.50M
EBITDA	35.66M	34.89M	34.99M	38.91M	39.81M	23.20M
Net Income	27.41M	27.36M	27.05M	30.81M	30.48M	18.27M
Balance Sheet
Total Assets	86.05M	90.74M	90.53M	89.62M	82.25M	64.81M
Cash, Cash Equivalents and Short-Term Investments	32.89M	39.03M	37.72M	37.37M	50.39M	33.73M
Total Debt	12.07M	12.47M	13.95M	15.24M	16.46M	16.29M
Total Liabilities	47.63M	55.02M	58.30M	59.81M	57.30M	45.26M
Stockholders Equity	38.42M	35.72M	32.23M	29.80M	24.95M	19.55M
Cash Flow
Free Cash Flow	31.87M	31.57M	31.47M	32.24M	45.06M	24.98M
Operating Cash Flow	32.76M	32.87M	33.04M	33.68M	46.46M	26.01M
Investing Cash Flow	-1.13M	-2.19M	-5.19M	-16.39M	-1.40M	-1.03M
Financing Cash Flow	-29.95M	-30.24M	-31.10M	-30.31M	-28.40M	-19.46M

OTC Markets Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 49.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 49.94 is below the 20-day moving average (MA) of 52.24, below the 50-day MA of 55.18, and below the 200-day MA of 51.26, indicating a bearish trend. The MACD of -1.24 indicates Positive momentum. The RSI at 32.97 is Neutral, neither overbought nor oversold. The STOCH value of 11.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OTCM.

OTC Markets Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ICE	81 Outperform	$98.59B	33.06	10.89%	1.08%	11.44%	29.10%
NDAQ	79 Outperform	$54.32B	36.37	13.28%	1.05%	23.55%	49.91%
CME	77 Outperform	$94.63B	25.41	13.62%	4.12%	11.15%	13.98%
CBOE	75 Outperform	$24.51B	27.48	20.64%	1.11%	18.99%	17.97%
OTCM	69 Neutral	$598.04M	21.58	64.10%	1.44%	6.23%	2.86%
Sector *	68 Neutral	$17.85B	11.54	9.95%	3.76%	9.70%	1.08%
DNB	63 Neutral	$4.08B	―	-1.16%	2.19%	1.97%	-14.06%