10 Best Canadian Stocks To Buy According to Wall Street Analysts

04. Tucows Inc. (NASDAQ:TCX)

Upside Potential: 206%

Average Analyst Share Price Target: $66.79

Tucows Inc. (NASDAQ:TCX), headquartered in Toronto, Canada, is a provider of internet services, including domain registration, mobile services, and fiber network solutions. The company has demonstrated strong fundamentals, supported by consistent revenue and margin growth across its segments. For the first quarter of 2024, Tucows Inc. (NASDAQ:TCX) reported a year-over-year revenue increase of 8.7% to $87.5 million, driven by its three core businesses: Wavelo, Ting, and Domains.

The Wavelo segment, which manages telecom services, saw substantial growth, with revenues rising 28.6% year-over-year, contributing significantly to the company’s adjusted EBITDA growth of 38.7% to $4.2 million. Meanwhile, the Ting fiber business reported strong subscriber additions, up 25.6%, highlighting its expanding footprint in small towns with fast internet services. Tucows Inc. (NASDAQ:TCX) long-established domain registration business continues to provide stable cash flow, with Domain Services revenue increasing 4.5% to $61.9 million. This solid performance supports Tucows Inc. (NASDAQ:TCX) strategy of reinvesting profits into higher-growth opportunities, such as fiber and Web3 ventures.

Despite macroeconomic headwinds, Tucows Inc. (NASDAQ:TCX) is well-positioned for long-term growth, particularly in fiber infrastructure and telecom services, which remain attractive investment areas. The company’s focus on capital-light, cash-generating businesses, along with its emphasis on scaling through subscription models, reflects its strong fundamentals and future growth potential.

Donville Kent Asset Management made the following comment about Tucows Inc. (NASDAQ:TCX) in its second quarter 2023 investor letter:

“We published our report on Tucows Inc. (NASDAQ:TCX) in our April newsletter and the stock is up ~75% off the bottom that month.7 That being said, it is currently trading around $40/share and we strongly believe it is worth $100/share. • The stock actually declined ~14% in June and has since recovered most of that decline. The reason for the temporary downturn seems to be the US Government announcing their $42.5B BEAD program. • “The federal government has allocated nearly $42.5 billion to expand broadband connectivity across the United States, a move that could spell a windfall for broadband equipment and service providers.” • Tucows will be able to participate in these funding programs and it appears like the stock sold off on the headline of this program with people not understanding the full extent of what it meant. • We recommend reading the article posted by SDX Central, which can be found in the footnotes.”