BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. TCS has performed really well in recent quarters due to strong Saas subscription bookings with Annual Recurring Revenue (ARR) up 27% to $75.4M compared to $59.5M in the same period last year, and is now trading at 3.7x times' Price/Sales.
In the 3Q, TCS’s total revenue grew 10% to $38.9M, beating estimates of $37M and EPS was $0.08, beating estimates of $0.07. The balance sheet is strong, with net cash of $27M.
Trailing twelve-month cash flow is still negative due to investment in working capital.
Based on consensus estimates, sales are expected to grow by 7%, while EPS is expected to be around $0.12 in 2023.
The company has been executing really well by growing its Saas subscriptions by more than 30%. It is not risk-free by any means, and its small size adds some risks.
But we would be comfortable adding.