Latest news with #CCOI
Yahoo
29-06-2025
- Business
- Yahoo
The Top 5 Analyst Questions From Cogent's Q1 Earnings Call
Cogent's first quarter results were met with a negative market reaction after the company reported revenue below Wall Street's expectations, driven by ongoing churn in legacy Sprint contracts and continued efforts to exit low-margin services. CEO Dave Schaeffer openly acknowledged these headwinds, stating, 'We have churned the vast majority of undesirable revenue from the Sprint base,' which contributed to the year-on-year revenue decline. On the positive side, Cogent highlighted significant growth in its wavelength services and improvements in operating margin, reflecting realized cost savings from the Sprint integration and ongoing network optimization. Is now the time to buy CCOI? Find out in our full research report (it's free). Revenue: $247 million vs analyst estimates of $249.6 million (7.2% year-on-year decline, 1% miss) Adjusted EPS: -$1.09 vs analyst estimates of -$1.11 (1.4% beat) Adjusted EBITDA: $43.76 million vs analyst estimates of $69.87 million (17.7% margin, 37.4% miss) Operating Margin: -16.3%, up from -22.3% in the same quarter last year Market Capitalization: $2.3 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Josh (Goldman Sachs) asked about competitive dynamics in the wavelength segment and the outlook for corporate revenue growth. CEO Dave Schaeffer said competitors lack Cogent's coverage and provisioning speed, and expects corporate revenue to stabilize after churn completes by mid-year. Greg Williams (TD Cowen) inquired about the slower dividend growth and milestones to resume a higher pace. Schaeffer linked future dividend increases to deleveraging, stating that net leverage reduction is the key trigger. Alex Waters (Bank of America) questioned the trajectory of wavelength average revenue per user (ARPU) and timing of data center monetization. Schaeffer expects ARPU to stabilize around $1,900–$2,000 as higher-capacity sales rise and noted data center deals are progressing but lack a fixed timeline. Walter Piecyk (LightShed) asked if wavelength growth is limited by customer readiness or Cogent's own capacity. Schaeffer clarified that Cogent can provision up to 500 installs per month, but growth is currently paced by customer preparedness. Chris Scholl (UBS) asked about the confidence behind raising long-term growth targets and segment-level growth rates. Schaeffer cited improved visibility after Sprint churn and forecasted double-digit NetCentric growth and mid-single-digit corporate growth post-churn. In the coming quarters, the StockStory team will be watching (1) Cogent's ability to complete the churn of low-margin Sprint contracts and achieve a return to revenue growth, (2) the scaling and monetization of its wavelength and data center assets, and (3) continued improvement in adjusted EBITDA margins as cost savings are realized. Progress on data center sales or leases, as well as sustained strength in IPv4 leasing, will also be key markers of execution. Cogent currently trades at $47.66, down from $53.14 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-06-2025
- Business
- Yahoo
1 Russell 2000 Stock with Solid Fundamentals and 2 to Keep Off Your Radar
Small-cap stocks in the Russell 2000 (^RUT) can be a goldmine for investors looking beyond the usual large-cap names. But with less stability and fewer resources than their bigger counterparts, these companies face steeper challenges in scaling their businesses. The high-risk, high-reward nature of the Russell 2000 makes stock selection critical, and we're here to guide you toward the right ones. That said, here is one Russell 2000 stock that could be a breakout winner and two best left off your watchlist. Market Cap: $1.21 billion A pioneer in connected home audio systems, Sonos (NASDAQ:SONO) offers a range of premium wireless speakers and sound systems. Why Should You Dump SONO? Annual revenue declines of 6.3% over the last two years indicate problems with its market positioning Poor expense management has led to operating margin losses Negative returns on capital show management lost money while trying to expand the business At $10.01 per share, Sonos trades at 48x forward P/E. If you're considering SONO for your portfolio, see our FREE research report to learn more. Market Cap: $2.20 billion Operating a massive network spanning 20,000 miles of fiber optic cable and connecting to over 3,200 buildings worldwide, Cogent Communications (NASDAQ:CCOI) provides high-speed Internet access, private network services, and data center colocation to businesses and bandwidth-intensive organizations across 54 countries. Why Are We Wary of CCOI? Free cash flow margin shrank by 37.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive Eroding returns on capital suggest its historical profit centers are aging Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution Cogent is trading at $46.90 per share, or 6.3x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including CCOI in your portfolio, it's free. Market Cap: $931.4 million Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE:AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements. Why Do We Like AGL? Market share has increased this cycle as its 40.5% annual revenue growth over the last two years was exceptional Average customer growth of 34.7% over the past two years demonstrates success in acquiring new clients that could increase their spending in the future Earnings per share grew by 14.5% annually over the last three years and trumped its peers agilon health's stock price of $2.27 implies a valuation ratio of 0.2x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Melden Sie sich an, um Ihr Portfolio aufzurufen.
Yahoo
09-05-2025
- Business
- Yahoo
Cogent Communications Holdings Inc (CCOI) Q1 2025 Earnings Call Highlights: Strong Wavelength ...
Release Date: May 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cogent Communications Holdings Inc (NASDAQ:CCOI) achieved a significant milestone by offering wavelength services in 883 data centers with 10GB, 100GB, and 400GB capabilities. Wavelength revenues for the quarter increased by 114% over the same period in 2023, reaching $7.1 million. The company has materially reduced provisioning times to approximately 30 days. Cogent Communications Holdings Inc (NASDAQ:CCOI) has realized the remainder of its targeted $220 million in cost savings from the acquisition of Sprint. Gross margin increased by 790 basis points from the first quarter of 2024 to 44.6%. Corporate revenue decreased by 11.4% year over year and 2.1% sequentially, primarily due to the grooming of low-margin off-net connections. Net-centric revenue declined sequentially by 1.1% and was negatively impacted by a decline in revenue from the commercial service agreement with T-Mobile. Enterprise revenue decreased by 11.3% year over year and sequentially by 4.1%, primarily due to a reduction in non-core and low-margin enterprise revenues. Off-net revenue decreased by 9.2% year over year and 5.2% sequentially. The company has increased its leverage, leading the board to slow the rate of dividend growth. Warning! GuruFocus has detected 5 Warning Signs with CCOI. Q: Within the waves business, are you seeing any change in competition, and do you think the Crown Castle's Zao deal will change the landscape? Also, can you update us on corporate revenue trends and your new revenue growth targets? A: Our primary competitors in the wavelength market struggle with provisioning and lack our coverage ubiquity. We have a significant advantage in this area. Regarding the Crown Castle Zao combination, it is likely a year away from impacting the market. As for corporate revenue, we expect to be through the undesirable Sprint revenue by mid-Q3, after which we anticipate positive total revenue growth. Q: On the dividend growth, is the half-penny per share increase temporary, and what milestones would be needed to return to a penny growth per quarter? Also, what needs to happen to reach the target of 500 wavelength circuits installed per month? A: The board is committed to returning capital to shareholders, and as our leverage begins to decline in Q4, we will evaluate increasing the dividend growth rate. Regarding wavelength installations, we have the capacity to install 500 orders a month, but currently, the funnel conversion rate is about 5%. We expect to reach the 500 installs per month target by year-end as the funnel grows. Q: Can you discuss the wavelength ARPU and where you see it trending throughout the year? Also, provide details on the data center monetization timing and scale. A: Our wavelength ARPU was just under $2,000 this quarter, and we expect it to stabilize around $1,900 to $2,000 as the base grows. For data center monetization, we are moving from letters of intent to contract negotiations and are motivated to sell surplus capacity, though exact timing is uncertain. Q: Regarding the slower internet traffic growth, what are you seeing in terms of pricing and implications for internet transit revenue? Also, have you noticed any changes in customer behavior since the tariff announcements? A: Internet traffic growth has slowed to about 8%, aligning with broader trends. Pricing declines remain consistent at about 22-23% annually. Tariffs have caused some initial shock, but we don't expect a material impact on our business. Corporate customers are cautious due to macroeconomic concerns, but we anticipate positive growth later this year. Q: Can you provide more details on the SG&A increase and what to expect in Q2? Also, how many IPv4 addresses were taken back this quarter? A: The SG&A increase was primarily due to seasonal factors and the full inclusion of Sprint employees. We expect a slight decrease in Q2 as payroll taxes decline. We took back approximately 600,000 to 700,000 IPv4 addresses due to policy violations. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Washington Post
08-05-2025
- Business
- Washington Post
Cogent: Q1 Earnings Snapshot
WASHINGTON — WASHINGTON — Cogent Communications Group Inc. (CCOI) on Thursday reported a loss of $52 million in its first quarter. On a per-share basis, the Washington-based company said it had a loss of $1.09. The results missed Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for a loss of $1.05 per share.
