Cogent Communications

At the Bank of America conference, Cogent said integration of the Sprint network assets acquired in 2023 is ongoing but causing delays and operational pressure due to supply bottlenecks. The company has so far sold 10 converted data centers for $225 million and plans to use the proceeds to reduce debt; 14 more sites remain for sale. Strong growth in the wavelength business is being driven by AI training, which now accounts for about 25% of the wavelength market and grew 62% in the last quarter, although Cogent’s 3% intercity market share is well below its long‑term target. Management sees further expansion potential from continued AI investment but expects supply‑chain and provisioning bottlenecks to slow short‑term deployment. » Więcej na de.investing.com

At the Citi TMT Conference 2026, Cogent said declines from the acquired Sprint business are easing and the organic business—with better margins and higher cash generation—is gaining importance. Traditional transit and VPN services still account for 84% of revenue, while fast‑growing areas such as IPv4 leasing (about $70m p.a.) and wavelength services (about $65m, +62% YoY) are contributing increasingly. The company sold 10 data centers for $225m, reduced debt and is reviewing capex, expects to return to positive revenue growth within one to two years, and sees further EBITDA upside even without T‑Mobile subsidies. Hardware supply‑chain bottlenecks could temporarily slow wavelength growth but are expected to ease next year. » Więcej na de.investing.com

At the Goldman Sachs conference, Cogent said its core business is growing, adjusted EBITDA margins have recovered to around 20%, and the Wavelength business grew from zero to USD 60m within 18 months. The company is selling data centers (10 facilities for USD 225m), using the proceeds to pay down debt and targeting a net leverage ratio of 4.0x (currently 6.23x). Management sees especially strong demand for Wavelength services for AI training as a long-term growth driver and expects annual margin improvements of at least 200 basis points. Shareholder returns will only be resumed after the leverage target has been reached. » Więcej na de.investing.com

Cogent Communications shares fell about 6.2% in premarket trading after JPMorgan downgraded the stock from Neutral to Underweight; the price target was cut from $22 to $9 and the target horizon moved to December 2027. JPMorgan cited a disappointing quarter, slower-than-expected Wave installations and revenue losses from expiring Sprint fixed‑line contracts. The bank pointed to high leverage (net leverage 6.75x), negative free cash flow and no clear path to the targeted leverage level, and said the data‑center monetization catalyst is largely exhausted. In Q2 Cogent reported revenue down 4.3% to $235.6m and adjusted EBITDA of $71.1m, both below expectations, after which the stock has fallen roughly 68% year‑to‑date. » Więcej na de.investing.com

The stock fell in pre-market trading after JPMorgan downgraded it from "Neutral" to "Underweight" and cut the price target from $22 to $9, with a target date of December 2027. JPMorgan cites a disappointing quarter, weaker revenue and EBITDA, slower customer uptake in the Wave business, and a high net leverage of around 6.75x. An ongoing securities class action is also weighing on investor sentiment, so the bank judges the stock's risk‑reward profile to have deteriorated significantly. » Więcej na de.investing.com