Cogent Communications (NASDAQ:CCOI) Coverage Initiated by Analysts at The Goldman Sachs Group

Key Points

• The Goldman Sachs Group has restated its "neutral" rating on Cogent Communications (NASDAQ:CCOI) with a target price of $40.00, indicating a potential upside of 4.63% from its current stock price.
• Recent earnings show that Cogent Communications reported a loss of ($1.21) earnings per share, missing analysts' estimates and showing a 5.4% decline in revenue year-over-year.
• The company initiated a share buyback program of $100 million, a sign that management may believe the stock is undervalued.

The Goldman Sachs Group began coverage on shares of Cogent Communications (NASDAQ:CCOI - Free Report) in a research report report published on Tuesday, MarketBeat reports. The firm issued a neutral rating and a $40.00 price target on the technology company's stock.

Several other analysts also recently weighed in on the company. Citigroup downgraded Cogent Communications from a "buy" rating to a "neutral" rating and cut their price target for the stock from $67.00 to $33.00 in a research note on Tuesday, August 12th. Royal Bank Of Canada restated a "sector perform" rating and issued a $40.00 price target (down previously from $74.00) on shares of Cogent Communications in a research note on Friday, August 8th. UBS Group cut their price target on Cogent Communications from $102.00 to $75.00 and set a "buy" rating on the stock in a research note on Friday, May 9th. Finally, Wells Fargo & Company upgraded Cogent Communications from an "underweight" rating to an "overweight" rating and set a $45.00 price target on the stock in a research note on Monday, August 18th. Two analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat, the company presently has a consensus rating of "Hold" and a consensus target price of $46.60.

Cogent Communications Trading Up 0.6%

CCOI traded up $0.22 during midday trading on Tuesday, reaching $36.88. 2,153,968 shares of the company's stock traded hands, compared to its average volume of 1,877,775. The firm has a fifty day moving average of $43.28 and a two-hundred day moving average of $52.01. The stock has a market capitalization of $1.81 billion, a price-to-earnings ratio of -8.12 and a beta of 0.81. The company has a debt-to-equity ratio of 49.06, a current ratio of 2.31 and a quick ratio of 2.31. Cogent Communications has a 52 week low of $29.61 and a 52 week high of $86.76.

Cogent Communications (NASDAQ:CCOI - Get Free Report) last released its quarterly earnings results on Thursday, August 7th. The technology company reported ($1.21) EPS for the quarter, missing analysts' consensus estimates of ($0.93) by ($0.28). Cogent Communications had a negative net margin of 21.57% and a negative return on equity of 117.56%. The business had revenue of $246.25 million for the quarter, compared to the consensus estimate of $247.79 million. During the same period in the previous year, the company earned ($0.68) EPS. The company's revenue for the quarter was down 5.4% on a year-over-year basis. On average, equities analysts anticipate that Cogent Communications will post -4.55 earnings per share for the current fiscal year.

Cogent Communications Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, September 5th. Stockholders of record on Thursday, August 21st were paid a $1.015 dividend. This is an increase from Cogent Communications's previous quarterly dividend of $1.01. The ex-dividend date was Thursday, August 21st. This represents a $4.06 dividend on an annualized basis and a dividend yield of 11.0%. Cogent Communications's dividend payout ratio (DPR) is -89.43%.

Cogent Communications declared that its board has initiated a share buyback program on Thursday, August 7th that permits the company to repurchase $100.00 million in outstanding shares. This repurchase authorization permits the technology company to purchase up to 4.6% of its stock through open market purchases. Stock repurchase programs are often an indication that the company's board of directors believes its stock is undervalued.

Insider Transactions at Cogent Communications

In other news, CEO Dave Schaeffer sold 1,840,669 shares of the firm's stock in a transaction on Thursday, August 7th. The stock was sold at an average price of $32.60, for a total value of $60,005,809.40. Following the transaction, the chief executive officer directly owned 1,516,052 shares in the company, valued at $49,423,295.20. This trade represents a 54.84% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, CFO Thaddeus Gerard Weed sold 4,900 shares of the firm's stock in a transaction on Monday, June 9th. The stock was sold at an average price of $48.04, for a total value of $235,396.00. Following the completion of the transaction, the chief financial officer owned 98,000 shares in the company, valued at approximately $4,707,920. This trade represents a 4.76% decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last quarter, insiders have sold 2,903,878 shares of company stock valued at $94,170,629. Corporate insiders own 11.40% of the company's stock.

Hedge Funds Weigh In On Cogent Communications

Several institutional investors and hedge funds have recently bought and sold shares of the stock. EdgePoint Investment Group Inc. lifted its position in Cogent Communications by 13.3% during the second quarter. EdgePoint Investment Group Inc. now owns 2,279,440 shares of the technology company's stock valued at $109,892,000 after purchasing an additional 267,143 shares in the last quarter. State Street Corp lifted its position in Cogent Communications by 0.8% during the second quarter. State Street Corp now owns 1,788,235 shares of the technology company's stock valued at $86,211,000 after purchasing an additional 13,510 shares in the last quarter. Magnolia Group LLC purchased a new position in Cogent Communications during the second quarter valued at $52,704,000. Geode Capital Management LLC lifted its position in Cogent Communications by 1.9% during the second quarter. Geode Capital Management LLC now owns 1,060,367 shares of the technology company's stock valued at $51,127,000 after purchasing an additional 20,055 shares in the last quarter. Finally, MIG Capital LLC lifted its position in Cogent Communications by 6.9% during the second quarter. MIG Capital LLC now owns 1,029,237 shares of the technology company's stock valued at $49,620,000 after purchasing an additional 66,203 shares in the last quarter. 92.45% of the stock is currently owned by hedge funds and other institutional investors.

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.