TUCOWS Inc. Will the Cows come home?


Tucows began as a startup software distribution company back in 1993 and has evolved and grown to various business services.

Tucows is now a provider of network access, domain names and other Internet services. Ting (https://ting.com) delivers mobile phone service and fixed Internet access with outstanding customer support. OpenSRS (http://opensrs.com) manages nearly 15 million domain names and millions of value-added services through a global reseller network of over 13,000 web hosts and ISPs. Hover (http://hover.com) makes it easy for individuals and small businesses to manage their domain names and email addresses. More information can be found on Tucows’ corporate website (http://tucows.com).


Tucows reported a fantastic earnings recently.

  • Year-on-year EPS growth is 86%.
  • 3 year and 5 year average growth is more than 40%.
  • Overall revenue grew by 11% year-over-year.
  • Gross Margin for Network Services for current quarter increases by 31%.
  • Gross Margin for Domain Services for current quarter increases by 10%.

Total Network expenses increase by 23%.


Current growth plans:

  • Ting Internet (4 towns underway)
  • Ting mobile

Economic moat:



  • Key people risk (CEO received a high 99% rating for glassdoor and is instrumental to the company’s success)
  • Other big players might follow to offer pay as you use model
  • Slight increase in Short interests


Key Metrics:

  • Price as of recommendation: $27.45
  • P/E: 20.4
  • P/B: 9.8
  • P/S: 1.7
  • Price/Cash Flow: 19
  • ROA: 10.56
  • ROE: 46.5
  • ROIC: 38.82
  • Current Ratio: 0.85 (could be a red flag), from my understanding this is due to pre-paid subscription model for their domain services.
  • PEG: 0.63
  • D/E: 0.31

Insider Trade (Possibly red flag)


The company outlook is positive but there are some risks in their growth. The growth will depend how well they execute and grow in Ting.


Disclosure: I own a small position of shares in TCX.

Useful links and Tools for Value Investor

Updated 26 Nov 17

A wonderful website to find Key Ratios, Metrics

Find out what billionaires and hedge funds are buying, selling, adding, reducing and their positions. The site also contains free valuation metrics such as DCF calculator.

Find out what insiders are buying and selling

An alternative website that shows guru buys and significant insider trades at one glance

A website that attempts to quantify and assigned a score and the best time to buy with the Jitta line.

An excellent website that checks on different Value investor gurus strategies and assigning a score.

Alternative: Nasdaq provides a more comprehensive list in their guru screeners

Excellent free stock screener

Want to find out how a company culture and CEO approval ratings? Glassdoor offers a good review on the company

Offers free screener and analysis of economic moat

Strategic list of weekly options premium

Good educational websites on options

ETF Resources

blog posts, interesting research, and non-consensus thinking curated daily “link-fest” websites

Search Twitter by ticker and see what investors are talking about

Other useful websites

Archive of white papers from Michael Mauboussin

Good blogs

Free lectures on valuation

Quick start to Accounting Terms in Financial Statement

A peek into earnings

A peek into what hedge funds are buying/selling

Find unusual options activity and history

Poor man Bloomberg & Screener