TeraGo Inc. (TGO) AI Stock Analysis

• Market Cap: C$25.84M
• Dividend Yield: N/A
• Average Volume (3M): 5.15K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.26
• Revenue Growth: 0.38%
• EPS Growth: 7.22%
• Country: CA
• Employees: 98
• Sector: Communication Services
• Sector Strength: 84
• Industry: Telecommunications Services
• EPS (TTM): -0.08
• Shares Outstanding: 20,034,328
• 10 Day Avg. Volume: 9,905
• 30 Day Avg. Volume: 5,147
• PEG Ratio: N/A
• Price to Book (P/B): 16.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 38.92
• 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

• Rating: 53 Neutral
• Price Target: C$1.50 ▲(16.28%Upside)

TeraGo Inc.'s overall stock score is primarily impacted by its weak financial performance, characterized by high debt levels and consistent losses. While technical analysis shows moderate bullish momentum, the valuation remains unattractive due to negative profitability. Positive corporate events, including strategic partnerships and financial maneuvers, offer some optimism for future growth, but significant financial challenges need to be addressed to enhance long-term value.

TeraGo Inc. Business Overview & Revenue Model

Company Description

TeraGo Inc., together with its subsidiaries, provides connectivity, colocation, and cloud services for businesses primarily in Canada. The company owns and operates a carrier-grade multi-protocol label switching enabled wireline and fixed wireless, and Internet protocol communications network that provide Internet access, private interconnection, and data connectivity services. It also offers data connectivity services that allow businesses to connect their various sites within a city or across the company's geographic footprint through a private virtual local area network; and a range of diverse Ethernet-based services over a wireless connection to customer locations. In addition, the company provides data center colocation services that protect and connect its customers' valuable information assets; disaster recovery services; and managed hosting solutions. It provides data center services for national government agencies, financial services companies, IT service providers, content and network service providers, and small and medium businesses. Further, the company offers cloud services, including infrastructure as a service for compute, storage, disaster recovery cloud solutions, and other services to customers in various industry verticals, federal, provincial, and municipal governments and agencies, as well as non-profit organizations. It provides its services through direct and indirect sales channels. TeraGo Inc. was incorporated in 2000 and is headquartered in Thornhill, Canada.

How the Company Makes Money

TeraGo Inc. generates revenue through a combination of subscription-based and usage-based models. The company's primary revenue streams include monthly recurring charges for cloud and data center services, such as virtual servers, storage, and managed IT solutions. Additionally, TeraGo earns revenue from providing internet connectivity services, where clients pay for bandwidth usage and network infrastructure services. Revenue is also driven by long-term contracts with enterprise customers who require reliable and scalable IT infrastructure solutions. Strategic partnerships with technology providers enhance TeraGo's service offerings, enabling the company to deliver comprehensive solutions that contribute to its earnings.

TeraGo Inc. Financial Statement Overview

Summary

TeraGo Inc. is facing significant financial challenges. The income statement indicates declining revenues and consistent net losses, with a negative net profit margin despite a positive gross profit margin. The balance sheet shows a high reliance on debt, with a substantial debt-to-equity ratio and negative return on equity. Cash flows are positive from operations but weak overall due to negative free cash flow growth. Improvement is needed in revenue generation, cost management, and debt reduction.

Income Statement

TeraGo Inc.'s income statement reveals a challenging period with declining revenues over the years and a consistent net loss. The TTM (Trailing-Twelve-Months) gross profit margin is 73.56%, which is strong, but the net profit margin is negative due to significant net losses. Despite a positive EBITDA margin of 12.38% in TTM, the EBIT margin remains negative, indicating high operating expenses relative to revenue. The company's revenue growth is negative, indicating a contraction in sales. Overall, the financial health from an income perspective is weak with potential areas for improvement in cost management and revenue generation.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 27.17 in TTM, indicating reliance on debt financing. The equity ratio is low at 3.19%, reflecting minimal shareholder equity relative to total assets. The return on equity is negative due to substantial net losses. The company needs to improve its capital structure by reducing liabilities or increasing equity to stabilize its financial position.

Cash Flow

Cash flow analysis shows mixed results with a positive operating cash flow to net income ratio of 0.28 in TTM, indicating some ability to convert income into cash. However, the free cash flow growth rate is negative, reflecting challenges in maintaining positive cash flow after capital expenditures. The free cash flow to net income ratio is just 0.05, showing minimal free cash flow relative to net income. The cash flow statement suggests the need for better cash management strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.11M	26.16M	26.05M	27.62M	43.30M	45.45M
Gross Profit	19.20M	19.18M	19.10M	20.18M	32.16M	35.63M
EBITDA	3.23M	2.79M	876.00K	603.00K	3.28M	11.33M
Net Income	-13.26M	-13.27M	-13.19M	-11.57M	-15.17M	-8.26M
Balance Sheet
Total Assets	50.57M	53.99M	53.50M	55.38M	93.23M	103.17M
Cash, Cash Equivalents and Short-Term Investments	2.09M	4.42M	4.64M	7.38M	5.48M	5.86M
Total Debt	43.82M	44.33M	31.93M	20.50M	35.91M	56.16M
Total Liabilities	48.96M	49.07M	36.16M	25.78M	52.97M	62.30M
Stockholders Equity	1.61M	4.92M	17.33M	29.60M	40.26M	40.87M
Cash Flow
Free Cash Flow	664.00K	1.48M	-5.45M	-4.96M	1.94M	5.72M
Operating Cash Flow	3.74M	5.01M	501.00K	1.25M	9.32M	13.33M
Investing Cash Flow	-3.01M	-3.52M	-5.02M	18.82M	-7.75M	-7.58M
Financing Cash Flow	-2.28M	-1.90M	2.69M	-19.34M	-1.95M	-8.58M

TeraGo Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.29
• 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 1.29 is above the 20-day moving average (MA) of 1.21, above the 50-day MA of 1.19, and below the 200-day MA of 1.37, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 55.05 is Neutral, neither overbought nor oversold. The STOCH value of 78.79 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
Sector *	61 Neutral	$41.24B	-0.79	-14.21%	3.80%	2.39%	-73.52%
TGO	53 Neutral	C$25.84M	―	-170.20%	―	0.38%	7.22%
BCE		$20.89B	83.21	2.83%	5.56%	―	―
RCI		$17.55B	13.54	16.65%	4.49%	―	―
TU		$24.69B	28.70	7.51%	7.33%	―	―
CGO	74 Outperform	C$664.00M	7.60	10.38%	7.36%	0.06%	115.11%
CGEAF		$2.26B	9.44	10.84%	5.00%	―	―

TeraGo Inc. Corporate Events

TERAGO Inc. Re-elects Board Members at 2025 Shareholder Meeting

TERAGO Inc. announced the re-election of all six nominees to its board of directors during the 2025 annual meeting of shareholders. This re-election ensures continuity in leadership as the company continues to leverage its extensive mmWave spectrum holdings to provide innovative wireless solutions, reinforcing its position in the Canadian market.

TERAGO Partners with Ericsson to Advance Private 5G Solutions in Canada

TERAGO Inc. has announced a strategic partnership with Ericsson to deliver advanced private 5G solutions across Canada. This collaboration aims to enhance operational efficiency and innovation for businesses by providing high-speed, low-latency connectivity, particularly benefiting sectors such as manufacturing, transportation, and logistics. As a member of Ericsson’s 5-star partner program, TERAGO is set to become a preferred provider of secure wireless network infrastructure, positioning itself to capitalize on the growing demand for seamless and secure connectivity in the digital age.

TeraGo Inc. Reports Q1 2025 Financial Results with Focus on Profitability and Efficiency

TeraGo Inc. reported its financial results for the first quarter of 2025, highlighting a disciplined focus on profitability and efficiency. Despite a slight decrease in total revenue due to increased churn from discontinuing unprofitable accounts, the company saw a 10.9% increase in Adjusted EBITDA, driven by higher gross margins and lower operating expenses. The company also noted a significant increase in backlog MRR and ARPA, reflecting its strategy to attract larger, multi-location customers. The recent consultation by Innovation, Science and Economic Development Canada (ISED) regarding mmWave spectrum is seen as a positive development, providing regulatory clarity and supporting TeraGo’s strategy in the evolving connectivity landscape.

TERAGO to Discuss Q1 2025 Financial Results in Upcoming Conference Call

TERAGO Inc. announced it will host a conference call on May 14, 2025, to discuss its first-quarter financial results for 2025, which will be released the day before. This event provides stakeholders an opportunity to gain insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and investor confidence.

TERAGO Inc. Secures $2M Through Private Placement of Warrants

TERAGO Inc. has successfully closed a private placement of 800,000 common share purchase warrants as part of a second amendment to its credit and guaranty agreement with Crowdout Capital LLC and Cymbria Corporation. The proceeds from this transaction, amounting to USD$2,000,000, will be used for capital expenditures and general corporate purposes. This move, involving a related party transaction, underscores TERAGO’s strategic financial maneuvers to bolster its operational capabilities and maintain its competitive edge in the managed network services industry.