Cogent Communications (NASDAQ:CCOI) Reaches New 52-Week Low After Earnings Miss

Key Points

• Cogent Communications hit a new 52-week low at $40.23 following an earnings miss, reporting a loss of ($1.21) EPS compared to analysts' expectations of ($0.77).
• The company declared a quarterly dividend of $1.015, reflecting an increase from the previous dividend, with an annual yield of 10.7%.
• Despite recent performance, Wall Street analysts maintain a consensus "Hold" rating with a target price of $75.75 for Cogent Communications stock.

Cogent Communications Holdings, Inc. (NASDAQ:CCOI - Get Free Report)'s share price hit a new 52-week low during mid-day trading on Thursday following a dissappointing earnings announcement. The stock traded as low as $43.00 and last traded at $40.23, with a volume of 2603 shares changing hands. The stock had previously closed at $43.88.

The technology company reported ($1.21) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.93) by ($0.28). Cogent Communications had a negative return on equity of 117.56% and a negative net margin of 21.57%. The company had revenue of $246.25 million for the quarter, compared to analysts' expectations of $247.79 million. During the same quarter in the previous year, the business earned ($0.68) EPS. The company's revenue for the quarter was down 5.4% on a year-over-year basis.

Cogent Communications Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Friday, September 5th. Stockholders of record on Thursday, August 21st will be issued a dividend of $1.015 per share. The ex-dividend date is Thursday, August 21st. This is a positive change from Cogent Communications's previous quarterly dividend of $1.01. This represents a $4.06 dividend on an annualized basis and a dividend yield of 12.9%. Cogent Communications's dividend payout ratio is currently -89.43%.

Cogent Communications declared that its Board of Directors has authorized a stock buyback program on Thursday, August 7th that allows the company to buyback $100.00 million in outstanding shares. This buyback authorization allows the technology company to reacquire up to 4.6% of its stock through open market purchases. Stock buyback programs are often a sign that the company's board of directors believes its stock is undervalued.

Analysts Set New Price Targets

CCOI has been the topic of several analyst reports. Royal Bank Of Canada reiterated a "sector perform" rating and set a $40.00 price target (down from $74.00) on shares of Cogent Communications in a report on Friday. The Goldman Sachs Group decreased their price objective on shares of Cogent Communications from $71.00 to $62.00 and set a "neutral" rating on the stock in a report on Friday, May 9th. Finally, UBS Group decreased their price target on shares of Cogent Communications from $102.00 to $75.00 and set a "buy" rating for the company in a research note on Friday, May 9th. Two investment analysts have rated the stock with a sell rating, three have given a hold rating and three have issued a buy rating to the company's stock. According to MarketBeat, the stock currently has a consensus rating of "Hold" and a consensus target price of $70.00.

Insiders Place Their Bets

In other Cogent Communications news, CEO Dave Schaeffer sold 1,840,669 shares of the stock in a transaction on Thursday, August 7th. The stock was sold at an average price of $32.60, for a total transaction of $60,005,809.40. Following the completion of the transaction, the chief executive officer directly owned 1,516,052 shares in the company, valued at $49,423,295.20. This represents a 54.84% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CRO James Bubeck sold 2,000 shares of the firm's stock in a transaction dated Wednesday, June 4th. The shares were sold at an average price of $47.50, for a total value of $95,000.00. Following the completion of the transaction, the executive owned 55,142 shares in the company, valued at approximately $2,619,245. This represents a 3.50% decrease in their position. The disclosure for this sale can be found here. Insiders sold a total of 2,286,169 shares of company stock valued at $81,290,878 over the last ninety days. 11.40% of the stock is owned by insiders.

Institutional Investors Weigh In On Cogent Communications

A number of hedge funds have recently modified their holdings of the business. Intech Investment Management LLC raised its position in shares of Cogent Communications by 1.3% during the second quarter. Intech Investment Management LLC now owns 49,371 shares of the technology company's stock worth $2,380,000 after purchasing an additional 623 shares during the period. Cetera Investment Advisers raised its position in Cogent Communications by 98.0% in the 2nd quarter. Cetera Investment Advisers now owns 14,016 shares of the technology company's stock valued at $676,000 after buying an additional 6,938 shares during the last quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS raised its position in Cogent Communications by 2.8% in the 2nd quarter. Commonwealth of Pennsylvania Public School Empls Retrmt SYS now owns 73,122 shares of the technology company's stock valued at $3,525,000 after buying an additional 1,976 shares during the last quarter. Police & Firemen s Retirement System of New Jersey raised its position in Cogent Communications by 6.0% in the 2nd quarter. Police & Firemen s Retirement System of New Jersey now owns 9,943 shares of the technology company's stock valued at $479,000 after buying an additional 561 shares during the last quarter. Finally, Geode Capital Management LLC increased its position in shares of Cogent Communications by 1.9% during the 2nd quarter. Geode Capital Management LLC now owns 1,060,367 shares of the technology company's stock worth $51,127,000 after purchasing an additional 20,055 shares during the last quarter. Institutional investors and hedge funds own 92.45% of the company's stock.

Cogent Communications Price Performance

The stock has a market cap of $1.55 billion, a price-to-earnings ratio of -6.94 and a beta of 0.68. The company has a 50-day simple moving average of $47.74 and a two-hundred day simple moving average of $57.76. The company has a debt-to-equity ratio of 49.06, a quick ratio of 2.31 and a current ratio of 2.31.

About Cogent Communications

Cogent Communications Holdings, Inc, through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services in North America, Europe, Oceania, South America, and Africa. The company offers on-net Internet access and private network services to law firms, financial services firms, and advertising and marketing firms, as well as heath care providers, educational institutions and other professional services businesses, other Internet service providers, telephone companies, cable television companies, web hosting companies, media service providers, mobile phone operators, content delivery network companies, and commercial content and application service providers.