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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3182
Positioning
Market Dominance
Services
Business Services
$206M
Elliot Noss
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.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = TCX ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | 21.3% | 18.6% | 64.5% | 35.7% | 39.5% | 6.5% | 0.0% | 0.0x | $644M | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | 15.4% | 12.6% | 38.7% | 17.1% | 17.0% | -39.7% | 0.0% | 0.0x | $439M | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 25.0x | 14.1x | 28.1% | 16.8% | 48.1% | 23.8% | 18.5% | 78.6% | 0.0% | 37.0x | $220M | VS | |
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | 12.4% | 2.9% | 100.0% | 28.2% | 26.2% | 5.5% | 0.8% | 264.0x | $19.4B | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.6% | 7.8% | 43.8% | 7.4% | 5.9% | 31.2% | 0.0% | 0.0x | $857M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 18.0% | 4.6% | 97.3% | 52.2% | 32.7% | -3.4% | 0.0% | 271.0x | $8.0B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | 9.4% | 4.9% | 55.5% | 8.7% | 7.7% | 13.6% | 1.3% | 7.0x | $78.0B | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | 22.1% | 15.6% | 62.5% | 28.1% | 28.7% | -1.0% | 2.8% | 9.0x | $56.6B | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 21.4% | 8.0% | 100.0% | 10.0% | 7.5% | 14.1% | 0.0% | 27.0x | $1.8B | VS | |
$TCX TUCOWS INC /PA/ | 43 | 27 | 45 | 69 | - | 8.6x | 43.1% | -10.3% | 24.0% | -6.4% | -19.9% | 10.2% | 0.0% | - | $206M | ||
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.3% | 1.9% | 59.6% | 3.5% | 2.3% | 7.8% | 0.0% | 0.3x | - | REF |
TUCOWS INC /PA/ (TCX) receives a "Reduce" rating with a composite score of 42.6/100. It ranks #3182 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Direct cash return
Elliot Noss
Chief Executive Officer
Labor Force
1,000
27
29
64
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for TCX
Outperforming peers — winners tend to keep winning over 3-12 months
Fair valuation relative to peers
Weak fundamentals — higher risk of value trap
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for TCX.
View All RatingsMaterial decline in asset turnover efficiency detected
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 27 | 12 | +15ALPHA |
| MOMENTUM | 69 | 77 | -8DRAG |
| VALUATION | 45 | 43 | +2NEUTRAL |
| INVESTMENT | 29 | 30 | -1NEUTRAL |
| STABILITY | 64 | 69 | -5NEUTRAL |
| SHORT INT | 26 | 11 | +15ALPHA |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC -1.8% vs WACC 5.6% (spread -7.4%)
GM 24% vs sector 60%, OM -6% vs sector 4%
Capital turnover 0.23x, R&D intensity 4.6%
Rev growth 10%, 10yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
TUCOWS INC /PA/ receives a Reduce rating from our analysis, with a composite score of 42.6/100 and 2 out of 5 stars, ranking #3182 out of 7,333 stocks. TCX's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
TCX's quality score of 27/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 43.1% (sector avg: 5.3%), gross margins of 24.0% (sector avg: 59.6%), net margins of -19.9% (sector avg: 2.3%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 45/100, TCX appears somewhat expensive relative to its fundamentals. Key valuation metrics include an EV/EBITDA of 8.58x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
TUCOWS INC /PA/'s investment score of 29/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 10.2% vs. a sector average of 7.8% and a return on assets of -10.3% (sector: 1.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
TCX demonstrates moderate momentum with a score of 69/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at 10.2% year-over-year, while a beta of 0.84 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
With a stability score of 64/100, TCX exhibits average financial resilience. Key stability metrics include a beta of 0.84. While the balance sheet is not a major concern, the stock is subject to typical market volatility and may experience sharper drawdowns during risk-off episodes.
TUCOWS INC /PA/'s short interest score of 26/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include micro-cap liquidity risk. At $206M (micro-cap), TCX carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
TUCOWS INC /PA/ is a micro-cap company in the Services sector, ranked #0 of 50 in its sector (100th percentile) and #3182 of 7,333 overall (57th percentile). Key comparisons include ROE of 43.1% exceeding the 5.3% sector median and operating margins of -6.4% below the 3.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
While TCX currently exhibits a REDUCE profile, superior opportunities exist within the SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Short Int. (26) would have the largest impact on the composite score.
EV/EBITDA 27% BELOW SECTOR MEDIAN (FAVORABLE)
ROE 712% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 60% BELOW SECTOR MEDIAN
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate TUCOWS INC /PA/ (TCX) as a Reduce with a composite score of 42.6/100 at a current price of $18.32. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in momentum (69th percentile) and stability (64th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (27th percentile) and investment (29th percentile) tempers our overall conviction. We assign a No Moat rating (19/100), High uncertainty, and Poor capital allocation.
Key items to watch: the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
TUCOWS INC /PA/ holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 42.6/100 places it at rank #3182 in our full 7,333-stock universe. At $206M in market capitalization, TUCOWS INC /PA/ is a small-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.
The outlook is moderately positive, with revenue expanding at 10% and favorable momentum (69th percentile) reflecting constructive market sentiment. The business shows steady execution, though the growth rate is below the levels typically associated with high-conviction growth stories. Momentum confirmation provides support for the current price level.
The margin cascade tells an important story: gross margins of 24% (-35.6pp vs sector) narrow to operating margins of -6% (-9.9pp vs sector) and net margins of -19.9%, yielding a gross-to-net conversion rate of -83%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $18.32, TUCOWS INC /PA/ is trading near fair value based on current fundamentals. Our value factor score of 45/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at EV/EBITDA of 8.6x (discounted to peers), P/S of 0.5x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.
Returns on equity of 43.1% exceed the cost of equity for most companies, indicating genuine shareholder value creation and a reinvestment engine that compounds wealth over time.
Revenue growth of 10% confirms the business is expanding its addressable market — growth at this level typically supports multiple expansion and attracts institutional capital.
Positive momentum (69th percentile) indicates institutional accumulation and favorable technical dynamics that tend to persist in the intermediate term.
The Reduce rating (composite 42.6/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Thin net margins of -19.9% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
We assign a High uncertainty rating to TUCOWS INC /PA/. Key risk factors include current negative profitability (net margin -19.9%), weak quality scores (27th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.
Specific risk factors that inform our assessment include: current negative profitability (net margin -19.9%); weak quality scores (27th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 64th percentile and quality factor at the 27th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: above-average stability (64th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.
We rate TUCOWS INC /PA/'s capital allocation as Poor. Key concerns include negative profitability, weak asset returns (ROA -10.3%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — TUCOWS INC /PA/ significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, TUCOWS INC /PA/ receives a Reduce rating with a composite score of 42.6/100 (rank #3182 of 7,333). Our quantitative framework assigns a No Moat (19/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 47/100.
Our analysis does not support a constructive view on TUCOWS INC /PA/ at this time. The combination of limited competitive advantages, high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign TUCOWS INC /PA/ a meaningful economic moat, scoring 19/100 on our composite assessment. The ROIC-WACC spread of -7.4% is the primary signal of economic value creation. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, growth durability, reached only 7.2/20.
The strongest moat sources are growth durability (7.2/20) and margin superiority (7/20). Rev growth 10%, 10yr history. GM 24% vs sector 60%, OM -6% vs sector 4%. These pillars form the core of TUCOWS INC /PA/'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include economic value creation (1.5/20) and reinvestment efficiency (1.6/20). ROIC -1.8% vs WACC 5.6% (spread -7.4%). Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect TUCOWS INC /PA/'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include moderate revenue growth of 10%, returns on equity of 43.1% driving shareholder value creation. The margin cascade from 24% gross to -6% operating to -19.9% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality raises some durability concerns, with the quality factor at the 27th percentile.
The margin profile shows gross margins of 24%, operating margins of -6%, net margins of -19.9%. Return metrics include ROE of 43.1% and ROA of -10.3%. Relative to the Services sector, gross margins are 35.6 percentage points below the sector median of 60%, and ROE of 43.1% compares to a sector median of 5.3%.
The balance sheet reflects revenue growth of 10%. Overall balance sheet health is adequate for the current business environment.
Below-average quality (27th percentile) raises durability concerns about the fundamental profile and increases the risk of negative earnings surprises.
Above 50MA
37.18%
Net New Highs
+51081
Tucows Inc. ( NASDAQ:TCX ) shares have had a horrible month, losing 28% after a relatively good period beforehand...
Tucows Inc (TCX) reports robust financial performance with significant growth in revenue and adjusted EBITDA, despite challenges in workforce restructuring and market expansion.

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