Tucows (TCX) AI Stock Analysis

• Market Cap: $159.64M
• Dividend Yield: N/A
• Average Volume (3M): 45.05K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.24
• Revenue Growth: 6.76%
• EPS Growth: -12.95%
• Country: US
• Employees: 765
• Sector: Technology
• Sector Strength: 51
• Industry: Software - Infrastructure
• EPS (TTM): -10.01
• Shares Outstanding: 11,032,586
• 10 Day Avg. Volume: 42,435
• 30 Day Avg. Volume: 45,051
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.52
• Price to Cash Flow (P/CF): -9.80
• P/FCF Ratio: 3.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Tucows' stock faces considerable challenges, primarily driven by weak financial performance, with declining revenues and negative margins. Technical analysis indicates downward momentum, while valuation metrics highlight poor attractiveness. The earnings call provided some optimism with revenue growth, but restructuring costs weigh heavily. Corporate events show strategic intent, but overall, the stock remains a risky prospect with a low score.

Tucows Business Overview & Revenue Model

Company Description

Tucows Inc. provides network access, domain name registration, email, mobile telephony, and other Internet services in Canada, the United States, and Europe. It operates through three segments: Fiber Internet Services, Mobile Services, and Domain Services. The Fiber Internet Services segment provides fixed high-speed Internet access services to individuals and small businesses primarily through the Ting website, and other billing solutions to small internet service providers. The Mobile Services segment offers mobile phones and retail telephony services; and professional services, including implementation, training, consulting, and software development and modification services, as well as operates Mobile Services Enabler platform that provides network access, provisioning, and billing services. The Domain Services segment provides wholesale and retail domain name registration services; portfolio services; and value-added services, such as hosted email, Internet security services, Internet hosting, WHOIS privacy, publishing tools, and other value-added services for end-users under the OpenSRS, eNom, Ascio, 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.

How the Company Makes Money

Tucows Inc. generates revenue through several key streams. The primary revenue source is its domain services business, which includes both wholesale and retail domain registration services. Through OpenSRS, Tucows provides domain registration and management services to resellers, generating income from domain registrations, renewals, and associated services. Hover, its retail arm, directly caters to consumers needing domain registration and management services. Another significant revenue stream is from Ting, the company's MVNO, which provides mobile phone services with a focus on flexible, pay-as-you-go billing models. Tucows earns revenue from subscriptions, data usage, and other mobile-related services. The company may also benefit from strategic partnerships that enhance service offerings and expand its customer base, though specific partnerships are not detailed here.

Tucows Financial Statement Overview

Summary

Tucows is facing significant financial challenges with declining revenues and negative profitability margins. The balance sheet is strained with negative equity, and cash flow is weak with consistent negative free cash flow. These factors indicate financial instability and necessitate strategic adjustments.

Income Statement

Tucows has faced declining revenue growth with a revenue decrease from 2023 to 2024. Gross Profit Margin is under pressure, and Net Profit Margin is negative due to substantial net losses. EBIT and EBITDA margins are also negative, indicating operational challenges. While the software industry typically sees strong growth and profitability, Tucows' financials suggest it is struggling to maintain competitive margins and growth.

Balance Sheet

The balance sheet reveals a negative equity position, with Stockholders' Equity in deficit at the end of 2024. The Debt-to-Equity ratio is not calculable due to negative equity, but the high level of total debt relative to assets suggests significant leverage. The equity ratio is negative, indicating more liabilities than assets. Tucows faces considerable financial risk and stability issues.

Cash Flow

Cash flow analysis shows negative free cash flow, reflecting high capital expenditures and insufficient operating cash flow. The Operating Cash Flow to Net Income ratio is negative, exacerbating concerns about cash generation from core operations. Despite some financing activities, such as inflow from financing, the overall cash flow health is weak, posing liquidity concerns.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
362.27M	339.34M	321.14M	304.34M	311.20M
	Gross Profit
83.03M	108.86M	78.25M	78.29M	85.48M
	EBIT
-65.01M	-63.65M	-31.38M	-8.19M	6.92M
	EBITDA
-1.82M	-12.19M	26.25M	211.34M	33.64M
	Net Income Common Stockholders
-109.86M	-96.20M	-27.57M	3.36M	5.78M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
56.90M	92.69M	23.50M	9.11M	8.31M
	Total Assets
758.80M	798.43M	664.75M	539.60M	451.90M
	Total Debt
318.69M	568.29M	256.01M	205.75M	132.67M
	Net Debt
261.79M	475.60M	232.51M	196.65M	124.36M
	Total Liabilities
854.10M	788.55M	568.09M	424.50M	347.20M
	Stockholders Equity
-95.30M	9.88M	96.66M	115.09M	104.70M
Cash Flow		Free Cash Flow
-76.20M	-97.35M	-117.62M	-44.31M	-8.43M
	Operating Cash Flow
-19.75M	-4.77M	19.88M	29.64M	36.08M
	Investing Cash Flow
-56.49M	-92.58M	-137.49M	-101.98M	-53.28M
	Financing Cash Flow
44.50M	178.84M	132.01M	73.14M	5.12M

Tucows Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCX, the sentiment is Negative. The current price of 16 is below the 20-day moving average (MA) of 16.48, below the 50-day MA of 17.44, and below the 200-day MA of 18.87, indicating a bearish trend. The MACD of -0.36 indicates Positive momentum. The RSI at 40.55 is Neutral, neither overbought nor oversold. The STOCH value of 29.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TCX.

Tucows Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AKAM	67 Neutral	$10.82B	22.69	10.66%	―	4.70%	-7.33%
TWLO	63 Neutral	$13.09B	―	-1.24%	―	7.32%	88.51%
RNG	60 Neutral	$2.08B	―	16.58%	―	8.99%	63.84%
Sector *	57 Neutral	$19.95B	9.66	-12.05%	2.76%	5.40%	-24.89%
ZG	54 Neutral	$14.79B	―	-2.39%	―	14.96%	29.56%
VERI	41 Neutral	$97.74M	―	-365.12%	―	-16.08%	-72.09%
TCX	37 Underperform	$159.64M	―	171.00%	―	6.76%	-12.95%

Tucows Corporate Events

Tucows Nominates Five New Board Members

On April 10, 2025, Tucows Inc. announced the nomination of five new individuals for election to its Board of Directors at the upcoming Annual General Meeting on May 20, 2025. The new nominees bring diverse expertise in finance, technology, and entrepreneurship, aligning with Tucows’ mission to innovate and expand its digital infrastructure. This board refresh marks a strategic step in the company’s long-term growth plans, while also honoring the contributions of outgoing directors who have significantly shaped Tucows’ leadership and culture.

Spark’s Take on TCX Stock

According to Spark, TipRanks’ AI Analyst, TCX is a Neutral.

Tucows faces financial instability with negative profitability and strained balance sheet metrics, leading to a low financial performance score. Despite some positive technical indicators and a favorable corporate event with DISH Wireless, the overall outlook is cautious due to valuation concerns and restructuring impacts. The company’s challenge lies in improving profitability and stabilizing operations to enhance investor confidence.

To see Spark’s full report on TCX stock, click here.

Tucows Subsidiary Renews Key Agreement with DISH Wireless

On January 30, 2025, Wavelo, a subsidiary of Tucows, renewed and amended its Mobile Virtual Network Enabler Master Services Agreement with DISH Wireless, extending it for an additional four-year term starting January 1, 2025. The renewal includes revised financial terms, updated service levels, and performance targets to meet DISH’s evolving needs, as well as ensuring business continuity through escrow arrangements and a parent guarantee by Tucows. This partnership renewal highlights Wavelo’s role in supporting DISH’s Boost Mobile network, which continues to deliver extensive 99% U.S. coverage and flexible service plans.