TeraGo Inc. (TGO) AI Stock Analysis

• Market Cap: C$18.05M
• Dividend Yield: N/A
• Average Volume (3M): 29.48K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.19
• Revenue Growth: -0.77%
• EPS Growth: -5.86%
• Country: CA
• Employees: 98
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): -0.08
• Shares Outstanding: 20,053,411
• 10 Day Avg. Volume: 28,809
• 30 Day Avg. Volume: 29,478
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: C$1.00
• Price Target Upside: 12.36% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 40 Underperform
• Price Target: C$1.00 ▲(12.36% Upside)

TeraGo Inc.'s overall stock score is primarily impacted by its poor financial performance, characterized by declining revenues and high financial leverage. Technical analysis indicates bearish momentum, and valuation metrics suggest the stock is unattractive due to negative earnings and lack of dividends. These factors collectively result in a low overall score.

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. makes money through a diversified revenue model primarily based on subscription and service fees for its cloud and data center offerings. Key revenue streams include recurring subscription fees for cloud infrastructure services, colocation services where businesses rent physical space for their servers, and managed network services that provide reliable connectivity solutions. Additionally, TeraGo may generate revenue from professional services offered to customize and optimize solutions for clients. Strategic partnerships with technology providers and vendors also play a role in enhancing TeraGo's service offerings and expanding its market reach, contributing to its earnings.

TeraGo Inc. Financial Statement Overview

Summary

TeraGo Inc. faces financial challenges with declining revenues, consistent net losses, high debt levels, and limited cash flow generation. The company needs to improve revenue growth, cost management, and debt reduction to enhance financial health.

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	25.87M	26.16M	26.05M	27.62M	43.30M	45.45M
Gross Profit	19.09M	19.18M	19.10M	20.18M	32.16M	35.63M
EBITDA	3.01M	2.79M	876.00K	603.00K	3.28M	11.33M
Net Income	-14.30M	-13.27M	-13.19M	-11.57M	-15.17M	-8.26M
Balance Sheet
Total Assets	49.70M	53.99M	53.50M	55.38M	93.23M	103.17M
Cash, Cash Equivalents and Short-Term Investments	1.93M	4.42M	4.64M	7.38M	5.48M	5.86M
Total Debt	46.57M	44.33M	31.93M	20.50M	35.91M	56.16M
Total Liabilities	51.82M	49.07M	36.16M	25.78M	52.97M	62.30M
Stockholders Equity	-2.12M	4.92M	17.33M	29.60M	40.26M	40.87M
Cash Flow
Free Cash Flow	1.40M	1.48M	-5.45M	-4.96M	1.94M	5.72M
Operating Cash Flow	4.95M	5.01M	501.00K	1.25M	9.32M	13.33M
Investing Cash Flow	-3.82M	-3.52M	-5.02M	18.82M	-7.75M	-7.58M
Financing Cash Flow	-3.00M	-1.90M	2.69M	-19.34M	-1.95M	-8.58M

TeraGo Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.89
• 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 0.89 is below the 20-day moving average (MA) of 0.93, below the 50-day MA of 1.05, and below the 200-day MA of 1.13, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 40.72 is Neutral, neither overbought nor oversold. The STOCH value of 35.46 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	75 Outperform	26.39B	17.09	13.56%	4.09%	1.87%	71.51%
T	73 Outperform	33.54B	34.02	6.35%	7.48%	2.56%	21.28%
CCA	67 Neutral	2.73B	8.30	10.46%	5.71%	-0.76%	-1.21%
CGO	64 Neutral	587.15M	6.60	10.28%	6.05%	-0.87%	9.49%
BCE	59 Neutral	29.76B	69.98	3.33%	8.91%	-0.66%	-78.79%
TGO	40 Underperform	C$18.05M	―	-322.49%	―	-0.77%	-5.86%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

TeraGo Inc. Corporate Events

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.

The most recent analyst rating on (TSE:TGO) stock is a Hold with a C$1.00 price target. To see the full list of analyst forecasts on TeraGo Inc. stock, see the TSE:TGO Stock Forecast page.

TeraGo Inc. Optimizes Customer Base Amidst Strategic Revenue Adjustments

TeraGo Inc. reported a strategic reduction in revenue for the second quarter and first half of 2025 due to a deliberate decision to let unprofitable customers churn, aligning with their long-term value creation strategy. Despite this, the company saw improvements in key metrics such as ARPA and backlog MRR, indicating a focus on profitable revenue generation and customer base optimization. The company remains confident in refinancing its debt facility and is well-positioned for future growth, bolstered by its significant mmWave spectrum holdings.

TERAGO Inc. Schedules Investor Call for Q2 2025 Financial Results

TERAGO Inc. has announced an investor conference call scheduled for August 13, 2025, to discuss its second-quarter financial results for 2025, which will be released on August 12, 2025. This announcement is significant as it provides stakeholders with insights into the company’s financial health and operational performance, potentially impacting its market positioning and investor relations.