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Investing.com - Goldman Sachs has initiated coverage on Cogent Communications (NASDAQ:CCOI) with a Neutral rating and a $40.00 price target. The stock currently trades at $38.23, having declined over 44% in the past six months. According to InvestingPro data, the company maintains an impressive 10.6% dividend yield.
The investment bank’s coverage begins as Cogent continues its strategic pivot toward stronger growth following its Sprint wireline acquisition, according to Goldman Sachs.
The firm provides various commercial fiber access solutions to corporate and enterprise customers, positioning itself in the telecommunications infrastructure market.
Goldman Sachs believes some of Cogent’s long-term opportunities, particularly in wavelengths transport, will take longer to materialize than current market expectations suggest.
The investment bank notes that Cogent’s stock performance will likely depend on improved top-line results, as revenue trajectory has disappointed investors over the past year.
In other recent news, Cogent Communications reported a second-quarter 2025 earnings per share (EPS) of -$1.21, which fell short of the forecasted -$0.99. Revenue also slightly missed expectations, coming in at $246.2 million compared to the anticipated $247.45 million. Following these results, TD Cowen lowered its price target for Cogent Communications from $77.00 to $62.00, although it maintained a Buy rating on the stock. The firm noted the disappointing EBITDA and Wave service installations in its analysis.
Additionally, Wells Fargo upgraded Cogent Communications from Underweight to Overweight, citing a favorable risk/reward profile and potential upside from asset sales. In contrast, S&P Global Ratings downgraded Cogent Communications to ’B’ from ’B+’, highlighting an increase in leverage to 7.5x as of June 30, 2025. S&P also assigned a negative outlook, indicating the possibility of a further downgrade if growth in the company’s Wavelength business does not meet expectations. These developments provide a mixed picture for investors assessing Cogent Communications’ recent performance and future prospects.
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