Cogent Communications (NASDAQ:CCOI) Shares Gap Up - Should You Buy?

Key Points

• Cogent Communications shares gapped up ahead of Tuesday’s open, rising from a previous close of $18.16 to an opening price of $20.15 before settling around $19.18.
• Analysts remain cautious overall: several firms cut price targets, and the stock now carries a Hold consensus with an average target price of $24.90.
• The company recently beat EPS estimates for the quarter but missed on revenue, while also reporting continued losses and a small quarterly dividend yielding about 0.4% annually.

Cogent Communications Holdings, Inc. (NASDAQ:CCOI - Get Free Report) shares gapped up before the market opened on Tuesday . The stock had previously closed at $18.16, but opened at $20.15. Cogent Communications shares last traded at $19.18, with a volume of 351,726 shares.

Wall Street Analyst Weigh In

CCOI has been the subject of several recent research reports. Oppenheimer decreased their target price on shares of Cogent Communications from $40.00 to $30.00 and set an "outperform" rating for the company in a research note on Monday, February 23rd. KeyCorp decreased their target price on shares of Cogent Communications from $30.00 to $25.00 and set an "overweight" rating for the company in a research note on Monday, February 23rd. Williams Trading set a $40.00 price objective on shares of Cogent Communications in a research report on Monday, February 23rd. JPMorgan Chase & Co. restated a "neutral" rating and issued a $22.00 price objective (down from $23.00) on shares of Cogent Communications in a research report on Tuesday, May 5th. Finally, TD Cowen reduced their price objective on shares of Cogent Communications from $40.00 to $34.00 and set a "buy" rating for the company in a research report on Tuesday, May 5th. Three analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the company has an average rating of "Hold" and a consensus target price of $24.90.

Cogent Communications Price Performance

The stock has a market cap of $979.56 million, a price-to-earnings ratio of -5.51 and a beta of 0.85. The stock's 50-day moving average is $19.68 and its 200 day moving average is $21.28.

Cogent Communications (NASDAQ:CCOI - Get Free Report) last announced its quarterly earnings data on Monday, May 4th. The technology company reported ($0.83) EPS for the quarter, beating analysts' consensus estimates of ($1.03) by $0.20. Cogent Communications had a negative net margin of 17.53% and a negative return on equity of 842.48%. The firm had revenue of $239.19 million during the quarter, compared to the consensus estimate of $241.31 million. During the same quarter last year, the firm earned ($1.09) earnings per share. The firm's revenue was down 3.2% compared to the same quarter last year. Analysts anticipate that Cogent Communications Holdings, Inc. will post -3.9 EPS for the current year.

Cogent Communications Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Tuesday, June 2nd. Shareholders of record on Monday, May 18th will be issued a $0.02 dividend. The ex-dividend date of this dividend is Monday, May 18th. This represents a $0.08 dividend on an annualized basis and a yield of 0.4%. Cogent Communications's dividend payout ratio (DPR) is -2.25%.

Insider Activity at Cogent Communications

In other Cogent Communications news, CFO Thaddeus Gerard Weed sold 4,850 shares of the stock in a transaction dated Thursday, March 5th. The shares were sold at an average price of $22.63, for a total value of $109,755.50. Following the completion of the transaction, the chief financial officer directly owned 202,750 shares of the company's stock, valued at approximately $4,588,232.50. This trade represents a 2.34% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, Director Sheryl Lynn Kennedy sold 3,300 shares of the stock in a transaction dated Thursday, March 5th. The shares were sold at an average price of $22.99, for a total transaction of $75,867.00. Following the completion of the transaction, the director directly owned 10,100 shares of the company's stock, valued at approximately $232,199. This trade represents a 24.63% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders sold 12,756 shares of company stock valued at $292,467. 4.20% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the stock. Parallel Advisors LLC increased its holdings in Cogent Communications by 208.6% in the first quarter. Parallel Advisors LLC now owns 1,432 shares of the technology company's stock valued at $27,000 after buying an additional 968 shares in the last quarter. Quarry LP purchased a new position in shares of Cogent Communications during the 3rd quarter worth approximately $27,000. Caitong International Asset Management Co. Ltd purchased a new position in shares of Cogent Communications during the 4th quarter worth approximately $28,000. Hantz Financial Services Inc. increased its stake in shares of Cogent Communications by 313.9% during the 4th quarter. Hantz Financial Services Inc. now owns 1,486 shares of the technology company's stock worth $32,000 after purchasing an additional 1,127 shares in the last quarter. Finally, Kestra Advisory Services LLC purchased a new position in shares of Cogent Communications during the 4th quarter worth approximately $43,000. 92.45% of the stock is owned by hedge funds and other institutional investors.

About Cogent Communications

Cogent Communications NASDAQ: CCOI is a multinational Internet service provider specializing in high-speed Internet access and data transport services. The company operates one of the largest Tier 1 IP networks in the world, offering wholesale and enterprise customers reliable, low-latency connectivity. Cogent's core services include dedicated Internet access, Ethernet transport, wavelength services, and MPLS-based IP Virtual Private Networks, all delivered over its privately owned, fiber-optic backbone.

In addition to network connectivity, Cogent provides data center colocation and managed services designed to support businesses with demanding bandwidth and redundancy requirements.

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