Analyst Note| Matthew Dolgin |
Cogent had a strong third quarter, with the underlying business performing much better than the mildly disappointing headline financial numbers would imply. The most important thing, in our view, is that the firm grew its corporate customer base for the first time since the pandemic began in the first quarter of 2020. We had expected this to occur, but we think the market has been fearful of a continual decline in that business due to a work-from-home culture. The firm’s netcentric business remained strong but suffered from unfavorable currency exchange rates. In all, nothing in the quarter made us change our forecast or our $65 fair value estimate.