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Cogent Communications Holdings Inc CCOI

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Stock XNAS Rating as of
$58.69 +0.18 (0.31%)
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As of Delayed Price Post-Trading: $59.02 +0.33
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Company Report

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Acquisition of Sprint Wireline Brings Cogent Network Advantages but Questionable Sales Opportunities

Matthew Dolgin

Cogent provides internet and private network connections for enterprises, and it carries internet traffic for internet service providers, content producers, and other websites. Both businesses face challenges as technological advancements allow those functions to be performed at lower cost, but we think Cogent's strategy leaves it positioned to succeed.

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Price vs Fair Value

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CCOI is trading at a 371% premium.
Price
$58.51
Fair Value
$97.00
Uncertainty
Medium
1-Star Price
$664.85
5-Star Price
$11.10
Economic Moat
Mhdxdk
Capital Allocation
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Bulls Say, Bears Say

Bulls

Unburdened by legacy services or networks, Cogent can capitalize on the latest technologies without realizing excessive costs or cannibalizing more lucrative revenue streams.

Bears

Deflationary pricing for internet transit, where Cogent is a market leader, will lead to diminishing profits on that business.

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News

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Trading Information

Previous Close Price
$58.51
Day Range
$57.38–59.16
52-Week Range
$57.35–86.00
Bid/Ask
$57.70 / $58.70
Market Cap
$2.88 Bil
Volume/Avg
594,997 / 501,521

Key Statistics

Price/Earnings (Normalized)
20.70
Price/Sales
2.66
Dividend Yield (Trailing)
6.49%
Dividend Yield (Forward)
6.67%
Total Yield
6.43%

Company Profile

Cogent carries over one fifth of the world's internet traffic over its network and is a broadband provider for businesses. Cogent's corporate customers are in high-rise office buildings; the firm provides them with two types of connections: dedicated internet access, which connects them to the internet, and virtual private networking, which offers an internal network for employees in different locations. Cogent's corporate customers are exclusively in North America and account for over half of the firm's revenue. Cogent's netcentric customers include internet service providers and content providers, to which Cogent provides internet transit. They hand traffic to Cogent in data centers and rely on Cogent to deliver it. About half of netcentric revenue is from outside the US.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Small Value
Total Number of Employees
1,955
Website
https://www.cogentco.com

Competitors

Valuation

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Metric
CCOI
LUMN
VZ
Price/Earnings (Normalized)
 20.7026.228.70
Price/Book Value
 5.732.681.82
Price/Sales
 2.660.091.28
Price/Cash Flow
 —0.484.46
Price/Earnings
CCOI
LUMN
VZ

Financial Strength

Metric
CCOI
LUMN
VZ
Quick Ratio
 1.060.770.52
Current Ratio
 1.381.030.71
Interest Coverage
 12.09−8.333.72
Quick Ratio
CCOI
LUMN
VZ

Profitability

Metric
CCOI
LUMN
VZ
Return on Assets (Normalized)
 4.97%−0.98%4.66%
Return on Equity (Normalized)
 43.40%−11.06%18.99%
Return on Invested Capital (Normalized)
 9.16%3.01%7.89%
Return on Assets
CCOI
LUMN
VZ
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