Tucows (TCX) AI Stock Analysis

• Market Cap: $205.31M
• Dividend Yield: N/A
• Average Volume (3M): 24.53K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.78
• Revenue Growth: 8.03%
• EPS Growth: -5.09%
• Country: US
• Employees: 765
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -1.73
• Shares Outstanding: 11,103,919
• 10 Day Avg. Volume: 37,560
• 30 Day Avg. Volume: 24,532
• PEG Ratio: 0.10
• Price to Book (P/B): -1.51
• Price to Sales (P/S): 0.64
• P/FCF Ratio: -10.85
• Enterprise Value/Market Cap: 4.07
• Enterprise Value/Revenue: 2.14
• Enterprise Value/Gross Profit: 7.99
• Enterprise Value/Ebitda: 12.79
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): $495.00M

• Rating: 42 Neutral
• Price Target: $18.00 ▼(-24.50% Downside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is primarily weighed down by balance-sheet stress (higher debt, negative equity) and continued negative cash flow/net losses despite a notable operating turnaround. Technicals also reflect a bearish trend below major moving averages. Earnings-call commentary adds uncertainty around 2026 margins and liquidity until deleveraging and the Ting divestiture improve financial flexibility.

Positive Factors

Recurring domain revenue

Tucows’ domain registrar platform produces recurring annual renewal revenue, providing a predictable revenue base. That durable, subscription-like cash flow supports stable topline visibility, enables reinvestment in platform scale and product improvements, and reduces reliance on one-off sales.

Operating performance turnaround

Material 2025 improvements show the business can generate strong operating margins and scale revenue. Sustained operational profitability implies better unit economics, the ability to cover fixed costs, and a pathway to convert operating gains into cash generation if below-operating drains are addressed.

Share buyback / capital access

A $40M buyback signals management confidence and demonstrates access to liquidity and credit. As a durable capital-allocation choice, it indicates governance focus on shareholder returns and that the company can deploy cash or credit to adjust capital structure when operational progress continues.

Negative Factors

Elevated leverage & negative equity

High debt and negative equity constrain financial flexibility and increase refinancing and interest-rate sensitivity. A stressed capital structure limits capacity for growth investments or absorbing shocks, raises covenant and solvency risk, and makes deleveraging a multi-quarter structural challenge.

Persistent negative free cash flow

Ongoing negative operating and free cash flows force reliance on external financing and limit self-funding of capex or debt reduction. Persistent cash burn increases refinancing and dilution risk, constrains strategic flexibility, and weakens the company’s ability to convert operating gains into sustained financial improvement.

Net losses driven by below-operating items

Despite operating profitability, heavy interest and other non-operating charges produce sizable net losses. This structural drag reduces retained earnings available for deleveraging, increases earnings volatility, and means operating gains alone may not translate into improved net solvency without addressing financing costs.

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 generates revenue primarily through its domain services segment, which includes domain registration, renewals, and related services such as SSL certificates and web hosting. The company operates a large-scale domain registrar platform, which allows it to earn recurring income from customers who renew their domain names annually. Additionally, Tucows earns income from its Ting mobile services, where it provides customers with pay-as-you-go mobile plans and generates revenue through a percentage of the usage charges. The company also has partnerships with various internet service providers and technology companies, enhancing its service offerings and distribution capabilities, which contribute to its overall earnings. Overall, Tucows' diversified revenue model, focusing on both domain services and mobile telecommunications, positions it well for continued growth in the digital economy.

Tucows Financial Statement Overview

Summary

Operating performance improved sharply in 2025 (revenue growth accelerated and EBIT turned positive), but overall fundamentals remain pressured by deeply negative net margins, negative operating/free cash flow, and a highly leveraged balance sheet with negative equity.

Income Statement

Revenue growth accelerated in 2025 (+144.8% vs. +6.8% in 2024), and profitability improved materially with EBITDA margin rising to ~35.9% and EBIT margin turning positive (~24.1%) after several loss years. However, bottom-line performance remains weak: net margin is still deeply negative in 2025 (~-19.4%) with sizable net losses, indicating that below-operating items (e.g., interest/other charges) are still overwhelming operating progress and earnings quality remains a concern.

Balance Sheet

Leverage is elevated and financial flexibility looks constrained. Total debt increased sharply to ~$681.7M in 2025 (from ~$513.1M in 2024), while stockholders’ equity is negative in both 2024 and 2025, which is a major balance-sheet risk and limits the usefulness of equity-based strength measures. Total assets are relatively stable, but the combination of rising debt and negative equity suggests a stressed capital structure and higher refinancing/interest-rate sensitivity.

Cash Flow

Cash generation remains challenged. Operating cash flow is negative in 2024 and 2025 (about -$19.7M and -$5.8M, respectively), and free cash flow is consistently negative across all years shown, with 2025 still at roughly -$22.9M (though improved vs. 2024). The trajectory shows some improvement in cash burn, but the business is not yet self-funding and continued negative free cash flow increases reliance on financing.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	390.30M	362.27M	339.34M	321.14M	304.34M
Gross Profit	93.95M	83.03M	108.86M	78.25M	78.29M
EBITDA	140.20M	-1.82M	-12.19M	26.38M	39.88M
Net Income	-75.82M	-109.86M	-96.20M	-27.57M	3.36M
Balance Sheet
Total Assets	730.91M	758.80M	798.43M	664.75M	539.60M
Cash, Cash Equivalents and Short-Term Investments	46.76M	56.90M	92.69M	23.50M	9.11M
Total Debt	681.73M	513.12M	568.29M	256.01M	205.75M
Total Liabilities	895.11M	854.10M	788.55M	568.09M	424.50M
Stockholders Equity	-164.20M	-95.30M	9.88M	96.66M	115.09M
Cash Flow
Free Cash Flow	-22.87M	-76.20M	-97.35M	-117.62M	-44.31M
Operating Cash Flow	-5.76M	-19.75M	-4.77M	19.88M	29.64M
Investing Cash Flow	2.16M	-56.49M	-92.58M	-137.49M	-101.98M
Financing Cash Flow	-5.39M	44.50M	178.84M	132.01M	73.14M

Tucows Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 23.84
• 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 23.84 is above the 20-day moving average (MA) of 19.55, above the 50-day MA of 21.71, and above the 200-day MA of 20.07, indicating a bearish trend. The MACD of -1.21 indicates Positive momentum. The RSI at 36.40 is Neutral, neither overbought nor oversold. The STOCH value of 46.23 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
MDB	75 Outperform	$25.44B	-357.13	-3.23%	―	20.93%	68.47%
VRSN	70 Outperform	$19.57B	24.25	―	0.94%	5.47%	-0.03%
GDDY	66 Neutral	$12.47B	12.68	192.90%	―	8.79%	-55.15%
ZS	62 Neutral	$23.82B	-593.37	-2.41%	―	23.24%	-8.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
OKTA	60 Neutral	$12.61B	67.03	2.96%	―	12.12%	―
TCX	42 Neutral	$205.31M	-2.73	―	―	8.03%	-5.09%