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Otc Markets Group (OTCM)
OTHER OTC:OTCM
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OTC Markets Group
(OTC:OTCM)
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Rating:79Outperform
Price Target:
$61.00
â–²(18.17% Upside)
OTC Markets Group demonstrates strong financial performance and positive earnings call sentiment, driving the overall score. Technical analysis supports a moderately bullish outlook, while valuation metrics indicate the stock is fairly valued. The absence of significant corporate events keeps the focus on core financial and operational strengths.
Positive Factors
Revenue Growth
Consistent double-digit revenue growth over three quarters indicates strong market demand and effective business strategies, supporting long-term expansion.
Successful Product Launch
The successful launch of OTCID demonstrates the company's ability to innovate and capture new market segments, enhancing its competitive position.
Operating Margin Improvement
Improved operating margins reflect efficient cost management and pricing power, contributing to sustainable profitability and financial health.
Negative Factors
Increased Transaction-Based Expenses
Rising transaction-based expenses could pressure profit margins, potentially impacting cash flow and limiting reinvestment in growth opportunities.
Decline in Nonprofessional User Revenues
A decline in nonprofessional user revenues suggests challenges in maintaining user engagement, which could affect future revenue streams.
Challenges with Pink Limited Companies
Challenges in upgrading Pink companies to OTCID may limit growth in this segment, affecting the company's ability to expand its service offerings.
OTC Markets Group (OTCM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$639.95M
Dividend Yield4.83%
Average Volume (3M)4.16K
Price to Earnings (P/E)22.1
Beta (1Y)0.10
Revenue Growth7.58%
EPS Growth7.48%
CountryUS
Employees134
SectorFinancial
Sector Strength70
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)1.06
Shares Outstanding11,975,122
10 Day Avg. Volume6,241
30 Day Avg. Volume4,164
Financial Highlights & Ratios
PEG Ratio-17.52
Price to Book (P/B)17.36
Price to Sales (P/S)6.12
P/FCF Ratio19.64
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue4.96
Enterprise Value/Gross Profit9.37
Enterprise Value/Ebitda15.38
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
OTC Markets Group Business Overview & Revenue Model
Company DescriptionOTC Markets Group (OTCM) operates a financial market platform that facilitates the trading of over-the-counter (OTC) securities. The company provides a venue for investors to trade a wide range of securities, including stocks, bonds, and other financial instruments. OTCM is primarily focused on the U.S. market and serves various sectors, including small-cap and micro-cap companies, as well as foreign companies seeking access to U.S. investors. Its core services include market data, trading services, and compliance solutions for issuers, enhancing transparency and efficiency in the OTC marketplace.
How the Company Makes MoneyOTC Markets Group generates revenue through several key streams. Primarily, it earns money from transaction fees charged to brokers and market participants for executing trades on its platform. Additionally, the company provides subscription-based services that offer market data, analytics, and compliance tools to issuers, investors, and other market participants. These subscriptions contribute a significant portion of its revenue. OTCM also charges fees for the listing and ongoing maintenance of securities on its platforms, including the OTCQX, OTCQB, and Pink markets. Partnerships with financial institutions and data providers further bolster its earnings by expanding its service offerings and enhancing market accessibility.
OTC Markets Group Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 11, 2026
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, successful product launches, and improved operating margins. However, these positives were somewhat offset by increased expenses and challenges with nonprofessional user revenues and Pink Limited companies. Overall, the positive aspects slightly outweigh the negatives.Q3-2025 Updates
Positive Updates
Strong Revenue Growth
Gross and net revenues grew by 15% during the third quarter of 2025, with a 12% increase for the first nine months of the year. This marks the third consecutive quarter of double-digit growth.
OTC Link and Market Data Performance
OTC Link increased by 23% during the quarter, and Market Data rose by 15%, driven by increased trading volume and price increases.
Successful Launch of OTCID
Since its launch on July 1, 2025, OTCID has seen rapid uptake with 1,077 companies trading on the OTCID Basic Market by the end of September, contributing to a 48% increase in DNS revenues.
Special Dividends Declared
A special dividend of $1.75 per share and a quarterly dividend of $0.18 per share were declared, reflecting a commitment to providing superior shareholder returns.
Operating Margin Improvement
Operating profit margin expanded to 34.6% from 32.4% in the prior year quarter, with income from operations increasing by 23%.
Negative Updates
Increased Transaction-Based Expenses
Transaction-based expenses increased by 50%, offsetting some of the revenue gains from OTC Link.
Decline in Nonprofessional User Revenues
Nonprofessional user revenues declined by 7% due to a 16% reduction in the reported nonprofessional user count.
Challenges with Pink Limited Companies
Some Pink companies may not qualify for upgrades to OTCID, and there is ongoing variability in Corporate Services subscribers.
Company Guidance
During the OTC Markets Group Third Quarter 2025 Earnings Conference Call, guidance was provided on several key metrics and strategic initiatives. Gross and net revenues each increased by 15% for the third quarter, marking the company's third consecutive quarter of double-digit growth, with a 12% increase over the first nine months of the year. OTC Link saw a revenue growth of 23%, Market Data increased by 15%, and Corporate Services was up 12%. The launch of the OTCID Basic Market on July 1, 2025, contributed to a 48% increase in DNS revenues, with 1,077 companies trading on the OTCID Basic Market by the end of Q3. The company maintained a strong operating profit margin at 34.6%, up from 32.4% in the prior year, and reported a 15% increase in net income. Additionally, a special dividend of $1.75 per share and a quarterly dividend of $0.18 per share were announced. The company continues to focus on its major strategic initiatives, including Overnight Trading and the expansion of the OTCID Market, while also exploring opportunities in digital assets and tokenization as regulatory clarity evolves.OTC Markets Group Financial Statement Overview
Summary
OTC Markets Group is in a strong financial position with solid profitability, effective equity utilization, and robust cash flow generation. Minor concerns exist regarding gross profit margin trends and debt reliance, but overall, the company is well-positioned for continued growth and stability.Income Statement
OTC Markets Group demonstrates strong profitability with a consistent net profit margin above 25% and a healthy EBIT margin. The company has shown positive revenue growth in the TTM period, indicating a recovery from previous fluctuations. However, the gross profit margin has slightly decreased, which could be a point of concern if the trend continues.Balance Sheet
The balance sheet reflects a solid financial position with a manageable debt-to-equity ratio, which has improved over time. The return on equity is robust, showcasing effective use of equity to generate profits. However, the equity ratio suggests a moderate reliance on debt, which should be monitored.Cash Flow
Cash flow analysis reveals strong free cash flow growth in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient cash conversion. The free cash flow to net income ratio remains stable, reflecting consistent cash flow management.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 118.07M | 101.23M | 109.89M | 105.15M | 99.91M | 68.42M |
| Gross Profit | 62.48M | 57.11M | 58.67M | 58.62M | 56.59M | 36.50M |
| EBITDA | 38.08M | 34.89M | 34.99M | 38.91M | 39.81M | 23.20M |
| Net Income | 29.11M | 27.36M | 27.66M | 30.81M | 30.48M | 18.27M |
Balance Sheet | ||||||
| Total Assets | 101.17M | 90.74M | 90.53M | 89.62M | 82.25M | 64.81M |
| Cash, Cash Equivalents and Short-Term Investments | 52.67M | 39.03M | 37.72M | 37.37M | 50.39M | 33.73M |
| Total Debt | 11.27M | 12.47M | 13.95M | 15.24M | 16.46M | 16.29M |
| Total Liabilities | 48.41M | 55.02M | 58.30M | 59.81M | 57.30M | 45.26M |
| Stockholders Equity | 52.76M | 35.72M | 32.23M | 29.80M | 24.95M | 19.55M |
Cash Flow | ||||||
| Free Cash Flow | 45.06M | 31.57M | 31.47M | 32.24M | 45.06M | 24.98M |
| Operating Cash Flow | 45.27M | 32.87M | 33.04M | 33.68M | 46.46M | 26.01M |
| Investing Cash Flow | -568.00K | -2.19M | -5.19M | -16.39M | -1.40M | -1.03M |
| Financing Cash Flow | -30.30M | -30.24M | -31.10M | -30.31M | -28.40M | -19.46M |
OTC Markets Group Technical Analysis
Positive
51.62
Price Trends
51.57
Positive
50.60
Positive
50.09
Positive
Market Momentum
0.43
Negative
58.82
Neutral
80.39
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTCM, the sentiment is Positive. The current price of 51.62 is below the 20-day moving average (MA) of 51.84, above the 50-day MA of 51.57, and above the 200-day MA of 50.09, indicating a bullish trend. The MACD of 0.43 indicates Negative momentum. The RSI at 58.82 is Neutral, neither overbought nor oversold. The STOCH value of 80.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OTCM.
OTC Markets Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $92.36B | 30.22 | 11.32% | 1.19% | 8.96% | 30.16% | |
79 Outperform | $639.95M | 22.12 | 57.35% | 4.83% | 7.58% | 7.48% | |
78 Outperform | $56.95B | 35.03 | 14.07% | 1.07% | 16.41% | 68.03% | |
75 Outperform | $27.31B | 28.01 | 21.51% | 1.06% | 16.74% | 26.74% | |
74 Outperform | $96.15B | 25.44 | 13.35% | 3.92% | 5.84% | 8.51% | |
71 Outperform | $8.73B | 24.66 | 24.42% | 0.84% | 7.76% | 15.92% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
OTCM
OTC Markets Group
53.44
2.92
5.78%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.