OTC Markets Group

US: OTCM

$392.2m market cap

$33.75 last close

OTC Markets Group operates the OTCQX, OTCQB and Pink financial markets for over 10,000 US and global securities. OTC Link LLC, a member of FINRA, operates OTC Link ATS and OTC Link ECN, both SEC-registered Alternative Trading Systems.

Investment summary

OTC Markets Group’s first quarter figures (announced in May) were affected by the one-off costs of its headquarters move and investment in additional headcount and IT infrastructure, in part supporting incremental acquisitions. Gross revenue was up 7% versus Q118 including 10% growth in Corporate Services, within which OTCQX Best market benefited from 16% corporate client growth, a particularly encouraging indicator. Market Data Licensing and OTC Link were 4% and 7% ahead, respectively. Operating expenses rose 15%, including one-off HQ move costs of c $0.5m, leaving pre-tax profits down 11% and diluted EPS, after a reduced tax charge, down 6%. Excluding one-off costs, net income would have risen 7%. The quarterly dividend was maintained at $0.15.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 54.7 19.7 18.4 105.8 31.9 18.1
2018A 59.3 20.7 19.8 136.3 24.8 16.0
2019E 62.5 20.2 19.3 133.8 25.2 18.5
2020E 65.8 22.8 21.8 147.4 22.9 15.1
Last updated on 25/07/2019
Industry outlook

OTCM continues to focus on improving the transparency and regulatory recognition of its markets and, reflecting the progress made to date, we expect further gains on this front to benefit the reputation of its markets. In future, this could mesh with the development of online fund-raising, which may create a larger pool of companies interested in the cost-effective secondary trading platforms offered by OTCM. OTCM’s Q219 results are due to be released 7 August with an earnings call the following day.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net cash (US$m) 27.2
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (3.2) (0.7) 10.7
Relative* (5.9) (3.3) 4.9
52-week high/low US$40.0/US$27.0
*% relative to local index
Key management
Cromwell Coulson CEO
Bea Ordonez CFO

Content on OTC Markets Group