Tecsys Inc (TCS-T)

Sells to hospitals, now expanding to pharmacies. Gold standard in US hospital network system. Recurring software revenues growing by over 30% a year, gross margins have expanded to over 70%. Guidance that EBITDA margins will exceed 10% next year. Trades at 3.5x revenues, huge discount to US peers. High quality.

Chart looks excellent - trending upwards. Has categorized as an aggressive investment. Expecting a $60/share price going forward. 

A great small-cap, a compounder, enjoying booming business in supply chain for hospitals. Its in the best space for the last 15 years. Growth trajectory will continue for years. Buy pullbacks.

Really likes the company and management, one of his biggest positions. Valuable technology franchise. De facto leaders in US for hospital supply chain management. All small- to mid-caps have been struggling for years. Lots of M&A, more to come.

Record results, this will continue with the backlog it has. Excellent, aggressive buying opportunity. No doubt in his mind that TCS will be snapped up down the road for significantly higher than trading today.

Based in Montreal, they sell supply-chain solutions to healthcare. Also in auto parts. They provide end-to-end solutions. They sold off hard in 2022, despite doubling revenues in the past 4 years, including growing high-margin recurring SAAS to 60% of total revenues. Profitable and reinvesting in organic growth. They dominate the US healthcare market. Trades at only 2.5x revenue, much lower than peers.

 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. 
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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Strong key performance indicators. Recent quarterly miss on earnings. SaaS business strong. Backlog burn slower than expected. Unlock Premium - Try 5i Free

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. EPS missed expectations though revenues beat expectations. Revenues increased by 12% you. The emphasis for companies on supply chain management will be a tailwind for them. They will continue to grow top line and if they benefit from FX then the company can perform quite well. Unlock Premium - Try 5i Free

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Revenu growth has accelerated recently. While the company is expensive on a price to earnings basis, it is still cheaper than most tech stocks on a price to sales basis. Unlock Premium - Try 5i Free