OTC Markets Group

US: OTCM

$482.3m market cap

$41 last close

OTC Markets Group operates the OTCQX, OTCQB and Pink financial markets for over 11,000 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. In FY20 82% of revenues were of a subscription-based recurring nature.

Investment summary

OTCM’s Q420 results showed revenue up 23% y-o-y at $19.8m. High levels of equity market trading and new subscribers on OTC Link ECN boosted OTC Link revenue substantially (+73%). Market Data Licensing revenue was also strong, up 18% following price increases and higher numbers of professional and retail users. Corporate Services revenue increased 6% with the contribution from Virtual Investor Conferences up by more than 3x and the Disclosure and News Service 14% ahead. With expenses up 5% and a lower tax charge net income was up 50% to $5.7m and there was a similar increase in EPS. The full year diluted EPS increased by 22% to $1.53. A maintained first quarter dividend of $0.15 was announced.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2019A 62.8 19.4 18.0 124.7 32.9 20.8
2020A 71.2 23.2 21.4 153.4 26.7 16.2
2021E 73.6 24.8 23.1 157.2 26.1 16.2
2022E 76.3 26.8 25.0 168.6 24.3 15.5
Industry outlook

Looking ahead, we assume trading activity levels will normalise at some point, potentially reducing OTC Link revenues. However, the Corporate Services segment is set to benefit from fee increases of 15% or more for corporate clients in both its premium markets in FY21 and may also sustain the improvement in client additions seen recently. Over 80% of revenues are subscription-based. On a longer view, the group keeps its focus on delivering better informed and more efficient markets.

Last updated on 13/04/2021
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Sector
Financials
Share price graph
Balance sheet
Forecast net cash (US$m) 43.7
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 3.4 17.1 50.2
Relative* (1.5) 7.8 0.1
52-week high/low US$41.8/US$26.5
*% relative to local index
Key management
Cromwell Coulson CEO
Antonia Georgieva CFO

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