Yahoo Finance Tech Stocks: Is Now The Time To Buy Tecsys Inc (TSE:TCS)?
Tecsys Inc (TSE:TCS), is a CA$224.4m small-cap, which operates in the software industry based in Canada. Whether it’s the next big thing in tech or an alliance with a partner in another industry, tech companies have plenty of opportunities for their companies to thrive. Tech analysts are forecasting for the entire software tech industry, a strong double-digit growth of 22.9% in the upcoming year , and an enormous triple-digit earnings growth over the next couple of years. Not surprisingly, this rate is more than double the growth rate of the Canadian stock market as a whole. Below, I will examine the sector growth prospects, and also determine whether Tecsys is a laggard or leader relative to its tech sector peers.
Check out our latest analysis for Tecsys
What’s the catalyst for Tecsys’s sector growth?
Many technologies are now coming into their own as their power and speed increase and the cost of delivering them goes down. In the past year, the industry delivered growth of 5.8%, though still underperforming the wider Canadian stock market. Tecsys lags the pack with its negative growth rate of -34.2% over the past year, which indicates the company has been growing at a slower pace than its software peers. However, the future seems brighter, as analysts expect an industry-beating growth rate of 77.9% in the upcoming year. This future growth may make Tecsys a more expensive stock relative to its peers.
Is Tecsys and the sector relatively cheap?
The software tech sector’s PE is currently hovering around 61.74x, above the broader Canadian stock market PE of 15.87x. This means the industry, on average, is relatively overvalued compared to the wider market. However, the industry returned a similar 9.2% on equities compared to the market’s 10.5%. On the stock-level, Tecsys is trading at a lower PE ratio of 56.3x, making it cheaper than the average software stock. In terms of returns, Tecsys generated 9.2% in the past year, in-line with its industry average.
Next Steps:
Tecsys’s industry-beating future is a positive for shareholders, indicating they’ve backed a fast-growing horse. In addition to this, its PE is below its tech peers, suggesting it is also trading at a relatively cheaper price. Perhaps the market hasn’t fully accounted for the growth, meaning now may be the right time to accumulate more of, or enter into, the stock. However, before you make a decision on the stock, I suggest you look at Tecsys’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has TCS’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Tecsys? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
