TeraGo Inc. (TGO) AI Stock Analysis

• Market Cap: C$27.27M
• Dividend Yield: N/A
• Average Volume (3M): 16.54K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.33
• 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: 38 Underperform
• Price Target: C$0.58 ▼(-6.13% Downside)

TeraGo Inc.'s overall stock score is primarily impacted by its poor financial performance and weak technical indicators. The company's financial distress, characterized by declining revenues and negative profitability, is the most significant factor. Technical analysis further reflects bearish momentum. Valuation metrics are unattractive due to negative earnings and lack of dividends. While the earnings call provided some positive strategic insights, the overall financial and market conditions weigh heavily on the stock score.

Positive Factors

Strategic Recapitalization

The recapitalization enhances TeraGo's financial flexibility, allowing it to invest in growth opportunities like 5G and next-gen connectivity, which can drive long-term business expansion.

Adjusted EBITDA Growth

Growth in adjusted EBITDA despite revenue decline indicates improved operational efficiency and cost management, which are crucial for long-term profitability.

Increased ARPA

An increase in ARPA suggests a more valuable customer base and effective product mix, supporting revenue stability and potential growth.

Negative Factors

Revenue Decline

The revenue decline reflects challenges in maintaining customer base and market share, which could hinder long-term growth if not addressed.

Extended Sales Cycle

Longer sales cycles can delay revenue realization and strain resources, impacting cash flow and growth momentum in the medium term.

Customer Churn Increase

Increased churn indicates customer retention issues, which can affect recurring revenue streams and necessitate higher acquisition costs.

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

TeraGo Inc. faces significant financial challenges, including declining revenues, persistent losses, and a highly leveraged balance sheet. Despite some positive cash flow trends, the overall financial health is under pressure, necessitating strategic adjustments.

Income Statement

TeraGo Inc. has experienced declining revenue over the TTM period with a significant drop of 89.2% compared to the previous year. The company has consistently reported negative net profit margins, indicating ongoing losses. Despite a relatively high gross profit margin, the negative EBIT and EBITDA margins highlight operational inefficiencies and challenges in covering operating expenses.

Balance Sheet

The balance sheet reveals a concerning financial structure with a negative stockholders' equity in the TTM period, leading to an extremely high debt-to-equity ratio of 27.17. This indicates significant leverage and financial risk. The return on equity is also negative, reflecting the company's inability to generate profits from shareholders' investments.

Cash Flow

The cash flow statement shows a positive trend in free cash flow growth, with a substantial increase of 111.3% in the TTM period. However, the operating cash flow to net income ratio is low, suggesting limited cash generation relative to net losses. The free cash flow to net income ratio is positive but indicates that cash flow improvements are not sufficient to cover net losses.

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: Negative
• Last Price: 0.62
• 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 TSE:TGO, the sentiment is Negative. The current price of 0.62 is below the 20-day moving average (MA) of 0.73, below the 50-day MA of 0.80, and below the 200-day MA of 1.01, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 42.03 is Neutral, neither overbought nor oversold. The STOCH value of 28.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TGO.

TeraGo Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RCI.B	80 Outperform	$27.34B	4.04	47.62%	3.96%	2.75%	342.54%
BCE	72 Outperform	$29.40B	4.75	31.28%	7.33%	0.11%	7109.23%
CCA	66 Neutral	C$2.78B	8.58	10.26%	5.70%	-2.22%	-2.36%
CGO	64 Neutral	C$595.54M	6.91	10.16%	6.08%	-2.14%	4.40%
T	62 Neutral	C$26.97B	22.45	7.30%	9.49%	2.42%	24.37%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TGO	38 Underperform	C$27.27M	-1.05	-755.68%	―	-1.53%	2.48%

TeraGo Inc. Corporate Events

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.

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.

TERAGO to Host Investor Call for Q3 2025 Financial Results

TERAGO Inc. announced it will hold an investor conference call on November 11, 2025, to discuss its third-quarter financial results, which will be released on November 10, 2025. This announcement underscores TERAGO’s commitment to transparency and engagement with its stakeholders, potentially impacting its market positioning by highlighting its financial health and strategic direction.

TeraGo Strengthens Financial Position with Successful Recapitalization

TeraGo Inc. has successfully closed its recapitalization transactions, significantly strengthening its financial position. The recapitalization, which includes a rights offering, a concurrent private placement, and a new term debt facility, provides TeraGo with the financial flexibility to advance its strategic priorities and capitalize on its valuable spectrum assets. This move is expected to enhance TeraGo’s ability to address the increasing demand for data-intensive applications, thereby unlocking meaningful value for stakeholders.

TERAGO Secures Over $12 Million in Rights Offering and Private Placement

TERAGO Inc. announced that it has received over $12 million in subscriptions for its rights offering and concurrent private placement, surpassing the initial target of $5.5 million. This funding is part of the company’s broader recapitalization strategy, which includes a $21 million term loan from EdgePoint Investment Group Inc. The transactions, aimed at refinancing existing debt, are contingent upon securing necessary approvals, including from the Toronto Stock Exchange, and are expected to close on October 15, 2025.

TeraGo Inc. Unveils Strategic Recapitalization Plan to Bolster Financial Position

TeraGo Inc. has announced a transformative recapitalization plan, involving a new term debt facility of US $21 million from EdgePoint Investment Group Inc. to refinance its existing debt. This plan includes a rights offering to raise additional capital, aiming to strengthen the company’s financial position and support its strategic initiatives. The recapitalization is expected to enhance TeraGo’s operational capabilities and market positioning, benefiting stakeholders by potentially increasing the company’s growth and stability.