TeraGo Inc. (TGO) AI Stock Analysis

• Market Cap: C$38.10M
• Dividend Yield: N/A
• Average Volume (3M): 16.54K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.05
• Revenue Growth: -1.53%
• EPS Growth: 2.48%
• Country: CA
• Employees: 98
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): >-0.01
• Shares Outstanding: 40,106,823
• 10 Day Avg. Volume: 15,030
• 30 Day Avg. Volume: 16,537
• PEG Ratio: 0.00
• Price to Book (P/B): 4.90
• Price to Sales (P/S): 0.92
• P/FCF Ratio: 16.26
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: C$0.95 ▲(52.42% Upside)

The score is primarily held back by weak financial performance (sharp revenue decline, ongoing losses, deteriorating cash flow, and negative equity/leverage risk). Technicals are supportive with price above key averages and positive MACD, but momentum looks somewhat stretched. Earnings call updates were moderately constructive (EBITDA improvement and recapitalization), though revenue softness, churn, and longer sales cycles remain key risks. Valuation is less supportive given the negative P/E and no dividend yield data.

Positive Factors

Recurring subscription revenue

A subscription-heavy business model (connectivity, cloud, managed services) yields predictable recurring revenue and contract-driven cash flow. This supports retention, upsell of bandwidth and cloud tiers, and long-term customer relationships that stabilize revenues over multiple quarters.

High gross profit margin

A 73.8% gross margin indicates core services are delivered with strong unit economics, giving room to absorb SG&A or invest in network expansion. If sales recover, high gross margins can translate into faster operating leverage and sustainable profitability over time.

Recapitalization increases financial flexibility

The ~$46M recapitalization materially improves liquidity and gives management runway to pursue strategic investments (5G private wireless, next-gen fixed wireless). This structural capital infusion reduces immediate solvency pressure and enables longer-term growth initiatives.

Negative Factors

Steep revenue decline

A >50% TTM revenue drop is a durable red flag: it compresses operating leverage, hinders reinvestment capacity, and signals structural customer loss or competitive displacement. Recovering top-line is essential for restoring margins and funding network investments.

Negative equity and high leverage

Negative equity and extreme leverage imply solvency risk and constrain strategic flexibility. Such a capital structure can limit access to unsecured financing, increase refinancing and covenant risk, and prioritize deleveraging over growth investments for the foreseeable term.

Weak cash generation

Severely declining free cash flow and low cash conversion reduce the company's ability to fund capex, network upgrades, or absorb downturns without external capital. Persistent weak cash generation heightens reliance on financing and undermines sustainable growth execution.

TeraGo Inc. Business Overview & Revenue Model

Company Description

TeraGo Inc. (TGO) is a Canadian telecommunications provider that specializes in offering high-speed internet, cloud services, and data center solutions to businesses across various sectors. With a focus on delivering reliable connectivity and innovative technology solutions, TeraGo serves small to medium-sized enterprises as well as larger organizations, enhancing their operational efficiency and digital capabilities. The company's core offerings include dedicated internet access, managed services, and customized cloud solutions, supported by a robust network infrastructure.

How the Company Makes Money

TeraGo generates revenue primarily through its telecommunications services, including high-speed internet and cloud services subscriptions. The company operates on a recurring revenue model, which means that a significant portion of its income is derived from monthly or annual service fees paid by customers. Key revenue streams include dedicated internet access fees, managed IT services, and colocation services within their data centers. Additionally, TeraGo benefits from strategic partnerships with technology and service providers, which enable them to enhance their service offerings and attract a broader customer base. Factors contributing to TeraGo's earnings include the growing demand for cloud services, the shift towards digital transformation among businesses, and the increasing need for reliable telecommunications solutions in a competitive market.

TeraGo Inc. Financial Statement Overview

Summary

Financial statements indicate significant stress: steep TTM revenue decline (-56.4%), deeply negative profitability (net margin -55.3%, EBIT margin -24.5%), weak cash generation (free cash flow growth -82.9% TTM), and a highly concerning balance sheet with negative equity (-$4.3M) and very high leverage (debt-to-equity -22.0).

Income Statement

TeraGo Inc. has experienced a significant decline in revenue, with a TTM revenue growth rate of -56.4%. The company is facing negative profitability margins, including a net profit margin of -55.3% and an EBIT margin of -24.5%. Although the gross profit margin remains relatively high at 73.8%, the overall income statement reflects financial challenges and declining performance.

Balance Sheet

The balance sheet shows a concerning financial structure with a negative stockholders' equity of -$4.3 million, resulting in a high debt-to-equity ratio of -22.0. The return on equity is also negative at -466.3%, indicating significant financial distress and potential solvency issues.

Cash Flow

Cash flow analysis reveals a substantial decline in free cash flow growth of -82.9% TTM. The operating cash flow to net income ratio is low at 0.13, indicating limited cash generation relative to net losses. Despite a positive free cash flow to net income ratio of 0.28, overall cash flow performance is weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	25.73M	26.16M	26.05M	27.62M	43.30M	45.45M
Gross Profit	16.73M	19.18M	19.10M	20.18M	32.16M	35.63M
EBITDA	4.41M	2.79M	496.00K	603.00K	3.28M	11.33M
Net Income	-13.33M	-13.27M	-13.19M	-11.57M	-15.17M	-8.26M
Balance Sheet
Total Assets	50.29M	53.99M	53.50M	55.38M	93.23M	103.17M
Cash, Cash Equivalents and Short-Term Investments	1.30M	4.42M	4.64M	7.38M	5.48M	5.86M
Total Debt	49.38M	44.33M	31.93M	20.50M	35.91M	56.16M
Total Liabilities	54.62M	49.07M	36.16M	25.78M	52.97M	62.30M
Stockholders Equity	-4.33M	4.92M	17.33M	29.60M	40.26M	40.87M
Cash Flow
Free Cash Flow	240.00K	1.48M	-5.45M	-4.96M	1.94M	5.72M
Operating Cash Flow	3.96M	5.01M	501.00K	1.25M	9.32M	13.33M
Investing Cash Flow	-2.24M	-3.52M	-5.02M	18.82M	-7.75M	-7.58M
Financing Cash Flow	-6.08M	-1.90M	2.69M	-19.34M	-1.95M	-8.58M

TeraGo Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TGO, the sentiment is Positive. The current price of 0.62 is below the 20-day moving average (MA) of 0.83, below the 50-day MA of 0.76, and below the 200-day MA of 0.97, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 64.89 is Neutral, neither overbought nor oversold. The STOCH value of 75.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TGO.

TeraGo Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QBR.A	78 Outperform	C$11.31B	14.03	35.34%	2.70%	-0.29%	15.30%
BCE	72 Outperform	C$32.82B	5.30	31.28%	7.42%	0.11%	7109.23%
CCA	72 Outperform	$2.77B	8.90	10.26%	5.69%	-2.22%	-2.36%
RCI.B	71 Outperform	$27.83B	4.03	40.24%	3.94%	2.75%	342.54%
T	62 Neutral	$29.47B	24.49	7.30%	9.49%	2.42%	24.37%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TGO	49 Neutral	C$38.10M	-1.47	-755.68%	―	-1.53%	2.48%

TeraGo Inc. Corporate Events

TERAGO Elevates May Daou to Chief Customer Officer to Drive Next Growth Phase

TERAGO Inc. has appointed May Daou as Chief Customer Officer, effective January 1, 2026, elevating a long-time executive who previously led revenue management and helped shape the company’s customer-focused commercial framework. In her new role, Daou will oversee end-to-end customer experience, including onboarding, service delivery, account management, retention, and customer advocacy, as well as customer-facing marketing and pre-sales support, signalling TERAGO’s intent to deepen relationships with mid-market and enterprise clients and reinforce its differentiation on service quality as it prepares for its next phase of growth in managed connectivity and private 5G services.

The most recent analyst rating on (TSE:TGO) stock is a Sell with a C$0.64 price target. To see the full list of analyst forecasts on TeraGo Inc. stock, see the TSE:TGO Stock Forecast page.

TERAGO Partners with Fortinet to Enhance Secure Networking Solutions

TERAGO Inc. has announced a strategic partnership with Fortinet to enhance its managed networking solutions by integrating advanced security features. This collaboration aims to set new standards for secure business networks in Canada, allowing businesses to benefit from seamless connectivity and robust data protection, thereby optimizing network performance and ensuring uninterrupted operations.

The most recent analyst rating on (TSE:TGO) stock is a Hold with a C$1.00 price target. To see the full list of analyst forecasts on TeraGo Inc. stock, see the TSE:TGO Stock Forecast page.

TeraGo Strengthens Financial Position Amid Revenue Decline

TeraGo Inc. reported a decrease in total revenue for the third quarter and nine months ended September 30, 2025, primarily due to increased churn as part of its strategy to optimize the customer base. Despite the revenue decline, the company saw an increase in Adjusted EBITDA due to higher gross margins and reduced operating expenses. TeraGo also completed a series of recapitalization transactions totaling approximately $46 million, strengthening its capital structure and providing financial flexibility to pursue growth opportunities in 5G private wireless and next-generation fixed-wireless connectivity.

The most recent analyst rating on (TSE:TGO) stock is a Hold with a C$1.00 price target. To see the full list of analyst forecasts on TeraGo Inc. stock, see the TSE:TGO Stock Forecast page.