Tucows Inc. Yearly Results Just Came Out: Here's What Analysts Are Forecasting For Next Year
Last week, you might have seen that Tucows Inc. (NASDAQ:TCX) released its yearly result to the market. The early response was not positive, with shares down 6.6% to US$57.03 in the past week. It was an okay result overall, with revenues coming in at US$337m, roughly what analysts had been expecting. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Tucows after the latest results.
View our latest analysis for Tucows
Taking into account the latest results, Tucows's only analyst currently expect revenues in 2020 to be US$338.0m, approximately in line with the last 12 months. Before this earnings result, analysts had predicted US$364.0m revenue in 2020, although there was no accompanying EPS estimate. The consensus seems a bit less optimistic overall, with the revenue forecasts following the latest results.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Tucows's performance in recent years. We would highlight that Tucows's revenue growth is expected to slow, with forecast 0.3% increase next year well below the historical 19%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 11% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Tucows to grow slower than the wider market.
The Bottom Line
Probably the biggest thing to take away from these latest forecasts is that brokers are definitely optimistic on the business, given the forecast for profitability next year. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. Analysts have not currently provided a price target, but the market responded negatively to the update with the share price falling -6.6% over the past week.
One Tucows broker/analyst has provided estimates out to 2023, which can be seen for free on our platform here.
It might also be worth considering whether Tucows's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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