Cogent Communications (NASDAQ:CCOI) Shares Gap Up on Analyst Upgrade

Key Points

• Cogent Communications shares gapped up from $34.25 to $36.26 before last trading at $37.49, indicating increased investor interest and market activity.
• Analysts have significantly adjusted their price targets for the stock, with Goldman Sachs lowering its target from $71 to $62, while UBS reduced its target from $102 to $75, reflecting a cautious outlook.
• The company has initiated a $100 million share buyback plan and increased its quarterly dividend to $1.015, demonstrating confidence in its financial stability despite recent earnings miss.

Cogent Communications Holdings, Inc. (NASDAQ:CCOI - Get Free Report) gapped up before the market opened on Monday after Wells Fargo & Company upgraded the stock from an underweight rating to an overweight rating. The stock had previously closed at $34.25, but opened at $36.26. Wells Fargo & Company now has a $45.00 price target on the stock. Cogent Communications shares last traded at $37.49, with a volume of 133,579 shares.

Other equities analysts also recently issued research reports about the company. The Goldman Sachs Group lowered their price target on Cogent Communications from $71.00 to $62.00 and set a "neutral" rating on the stock in a report on Friday, May 9th. UBS Group lowered their price target on Cogent Communications from $102.00 to $75.00 and set a "buy" rating on the stock in a report on Friday, May 9th. Royal Bank Of Canada reiterated a "sector perform" rating and set a $40.00 price target (down previously from $74.00) on shares of Cogent Communications in a report on Friday, August 8th. Finally, Citigroup downgraded Cogent Communications from a "buy" rating to a "neutral" rating and lowered their price target for the company from $67.00 to $33.00 in a report on Tuesday, August 12th. Three equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $57.50.

Insider Buying and Selling at Cogent Communications

In related 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 completion of the transaction, the chief executive officer directly owned 1,516,052 shares of the company's stock, valued at $49,423,295.20. This trade represents a 54.84% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. 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 directly owned 98,000 shares of the company's stock, 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. Over the last ninety days, insiders sold 3,082,078 shares of company stock valued at $102,726,826. 11.40% of the stock is owned by company insiders.

Institutional Investors Weigh In On Cogent Communications

Several institutional investors and hedge funds have recently made changes to their positions in CCOI. Magnolia Group LLC acquired a new stake in shares of Cogent Communications in the 2nd quarter valued at $52,704,000. DigitalBridge Group Inc. raised its holdings in shares of Cogent Communications by 246.0% in the fourth quarter. DigitalBridge Group Inc. now owns 907,916 shares of the technology company's stock valued at $69,973,000 after buying an additional 645,521 shares during the last quarter. EdgePoint Investment Group Inc. raised its holdings in shares of Cogent Communications by 30.4% in the first quarter. EdgePoint Investment Group Inc. now owns 2,012,297 shares of the technology company's stock valued at $123,374,000 after buying an additional 469,028 shares during the last quarter. Invesco Ltd. raised its holdings in shares of Cogent Communications by 84.2% in the second quarter. Invesco Ltd. now owns 1,003,273 shares of the technology company's stock valued at $48,368,000 after buying an additional 458,698 shares during the last quarter. Finally, Qube Research & Technologies Ltd raised its holdings in shares of Cogent Communications by 144.2% in the second quarter. Qube Research & Technologies Ltd now owns 687,839 shares of the technology company's stock valued at $33,161,000 after buying an additional 406,129 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 fifty day moving average of $45.52 and a 200-day moving average of $55.53. The company has a quick ratio of 2.31, a current ratio of 2.31 and a debt-to-equity ratio of 49.06. The firm has a market capitalization of $1.85 billion, a P/E ratio of -8.26 and a beta of 0.68.

Cogent Communications (NASDAQ:CCOI - Get Free Report) last released its quarterly earnings results on Thursday, August 7th. The technology company reported ($1.21) earnings per share (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 during the quarter, compared to the consensus estimate of $247.79 million. During the same period in the prior year, the firm earned ($0.68) earnings per share. The business's quarterly revenue was down 5.4% compared to the same quarter last year. Equities analysts predict that Cogent Communications Holdings, Inc. will post -4.55 EPS for the current fiscal year.

Cogent Communications Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, September 5th. Investors of record on Thursday, August 21st will be issued a $1.015 dividend. 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 10.8%. The ex-dividend date of this dividend is Thursday, August 21st. Cogent Communications's dividend payout ratio (DPR) is presently -88.99%.

Cogent Communications declared that its board has initiated a share buyback plan on Thursday, August 7th that allows the company to repurchase $100.00 million in shares. This repurchase authorization allows the technology company to purchase up to 4.6% of its shares through open market purchases. Shares repurchase plans are typically a sign that the company's leadership believes its stock is undervalued.

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.