Cogent Communications Holdings Inc

CCOI: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$65.00	Xcgcgrg	Nphxkpyvch

Cogent Earnings: Margins Are Improving as Wavelength Growth Remains in the Future

Michael Hodel

Aug 9, 2024

Cogent made progress in improving profitability during the second quarter as it continues to work through the Sprint wireline integration. The firm also provided its perspective on the fiber agreements rival Lumen announced recently with several major cloud/artificial intelligence firms. We believe Cogent is too optimistic about the volume of revenue it will generate, but we agree that it has an opportunity to grow at high returns on capital. Our fair value estimate remains $75, and we believe the shares are modestly undervalued.

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