Cogent Communication (CCOI): Volume Discounts Should Drive Elasticity - Oppenheimer
- Top 10 News for 10/17 - 10/21: Merger Rumors Abound; CEOs Depart; Tesla Kicks Autopilot Up A Notch
- Wall Street ends little changed; Microsoft hits record
- AT&T (T) in Advanced Talks to Acquire Time Warner (TWX) - DJ
- Rockwell Automation (ROK) Said to Attract Takeover Interest from Schneider Electric - Source
- British American Tobacco Offers to Acquire Remaining Shares of Reynolds American (RAI) for $56.50/Share
News and research before you hear about it on CNBC and others. Claim your 2-week free trial to StreetInsider Premium here.
Oppenheimer analyst, Timothy Horan, reiterated his Outperform rating on shares of Cogent Communications (NASDAQ: CCOI) after the company reported a mixed 2Q16 with strong customer growth, but weak IP transit pricing. These trends drove revenue of $110M, below expectations and EBITDA margins of 31.8% which also missed. Transit pricing was impacted by volume discounts (which likely lowered NFLX revenue 1%). However, the analyst views this as a positive due to expected elasticity/incremental sequential traffic growth.
2Q tends to be CCOI's weakest quarter in terms of sales productivity, and despite tough comps next quarter, the analyst continues to expect over 13% growth YoY on the corporate side. Yielding 4%, and with FCF growing by 20%+, the analyst thinks that the stock pullback is a good buying opportunity with buybacks likely resuming.
No change to the price target of $45.00
Shares of Cogent Communications closed at $36.83 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- PayPal (PYPL) PT Raised to $45 at Oppenheimer
- PayPal (PYPL) PT Lifted to $48 at Mizuho Following Solid Q3
- Proofpoint (PFPT): Separating From The Pack - Wedbush
Create E-mail Alert Related CategoriesAnalyst Comments
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!