Stock Buyback Program Declared by Cogent Communications (NASDAQ:CCOI) Board of Directors

Key Points

• The Cogent Communications board has authorized a stock buyback program worth $100 million, enabling repurchase of up to 4.6% of its shares, which typically indicates the board believes the stock is undervalued.
• Recent analyst reports have downgraded Cogent's stock price targets, with Goldman Sachs lowering its target from $71.00 to $62.00, while the majority of analysts maintain a "Hold" rating with a consensus price target of $75.75.
• After reporting negative earnings per share of ($1.21), Cogent Communications' stock fell by 19.5% on the announcement day, reflecting growing investor concerns about its financial performance.

Cogent Communications (NASDAQ:CCOI - Get Free Report) announced that its board has approved a stock repurchase program on Thursday, August 7th, RTT News reports. The company plans to buyback $100.00 million in shares. This buyback authorization authorizes the technology company to repurchase up to 4.6% of its stock through open market purchases. Stock buyback programs are usually an indication that the company's board believes its stock is undervalued.

Wall Street Analyst Weigh In

A number of research analysts recently commented on the stock. The Goldman Sachs Group lowered their price objective on shares of Cogent Communications from $71.00 to $62.00 and set a "neutral" rating on the stock in a research report on Friday, May 9th. UBS Group lowered their price target on shares of Cogent Communications from $102.00 to $75.00 and set a "buy" rating on the stock in a report on Friday, May 9th. Two investment analysts have rated the stock with a sell rating, two have given a hold rating and five have given a buy rating to the company's stock. Based on data from MarketBeat, the company presently has a consensus rating of "Hold" and a consensus price target of $75.75.

Cogent Communications Stock Down 19.5%

Shares of CCOI stock traded down $8.54 on Thursday, hitting $35.34. The company's stock had a trading volume of 4,713,102 shares, compared to its average volume of 649,375. The stock has a market capitalization of $1.74 billion, a price-to-earnings ratio of -8.81 and a beta of 0.68. Cogent Communications has a fifty-two week low of $33.79 and a fifty-two week high of $86.76. The firm's fifty day moving average price is $48.04 and its 200-day moving average price is $58.29. The company has a debt-to-equity ratio of 13.89, a current ratio of 1.49 and a quick ratio of 1.49.

Cogent Communications (NASDAQ:CCOI - Get Free Report) last posted its earnings results on Thursday, August 7th. The technology company reported ($1.21) earnings per share for the quarter, missing the consensus estimate of ($0.93) by ($0.28). The company had revenue of $246.25 million for the quarter, compared to the consensus estimate of $247.79 million. Cogent Communications had a negative net margin of 18.76% and a negative return on equity of 70.29%. Cogent Communications's quarterly revenue was down 5.4% on a year-over-year basis. During the same quarter last year, the business earned ($0.68) earnings per share. Research analysts anticipate that Cogent Communications will post -4.55 EPS for the current year.

Cogent Communications Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, September 5th. Shareholders of record on Thursday, August 21st will be given a dividend of $1.015 per share. This represents a $4.06 dividend on an annualized basis and a yield of 11.5%. This is a boost from Cogent Communications's previous quarterly dividend of $1.01. Cogent Communications's dividend payout ratio is presently -100.75%.

Insider Activity

In related news, CRO James Bubeck sold 2,000 shares of Cogent Communications stock in a transaction on Wednesday, June 4th. The shares were sold at an average price of $47.50, for a total value of $95,000.00. Following the transaction, the executive owned 55,142 shares in the company, valued at $2,619,245. This trade represents a 3.50% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, Director Lewis H. Ferguson sold 1,100 shares of the business's stock in a transaction on Wednesday, May 28th. The stock was sold at an average price of $47.57, for a total transaction of $52,327.00. Following the transaction, the director directly owned 18,904 shares of the company's stock, valued at approximately $899,263.28. This represents a 5.50% decrease in their position. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 445,500 shares of company stock valued at $21,285,069. Insiders own 11.40% of the company's stock.

Cogent Communications Company Profile

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.

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