Pivotal Research See 22% Upside in Shares Cogent Communications (CCOI), Initiates Buy
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Price: $28.54 -1.48%
Rating Summary:
7 Buy, 7 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 8
Rating Summary:
7 Buy, 7 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 8
Trade CCOI Now!
Pivotal Research initiated coverage on Cogent Communications (NASDAQ: CCOI) with a Buy rating and a price target of $26.50, implying 22 percent upside from current levels included dividends.
"Pricing pressure in net centric business continues, but is being offset by faster traffic growth and new customer wins,” said analyst Steve Sweeney. “Some new CCOI customer wins from competitors this month have been priced at $0.75 per megabit. However, traffic volume growth and market shares gains are offsetting the price declines and we believe that 2H total revenue run rate growth will
accelerate from the depressed 1H levels."
"We expect topline revenue growth to accelerate in 2013 vs. artificially low 2012 levels," added Sweeney. "Improving EBITDA margins and lower capital intensity of the business should drive improving equity free cash flow growth in 2013. Given its low leverage, $237 million in cash on its balance sheet, and $38 million+ of equity free cash flow in 2013 based on our estimates, we think CCOI is set to return more capital to shareholders."
For an analyst ratings summary and ratings history on Cogent Communications click here. For more ratings news on Cogent Communications click here.
Shares of Cogent Communications closed at $22.03 yesterday, with a 52 week range of $12.63-$22.25.
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"Pricing pressure in net centric business continues, but is being offset by faster traffic growth and new customer wins,” said analyst Steve Sweeney. “Some new CCOI customer wins from competitors this month have been priced at $0.75 per megabit. However, traffic volume growth and market shares gains are offsetting the price declines and we believe that 2H total revenue run rate growth will
accelerate from the depressed 1H levels."
"We expect topline revenue growth to accelerate in 2013 vs. artificially low 2012 levels," added Sweeney. "Improving EBITDA margins and lower capital intensity of the business should drive improving equity free cash flow growth in 2013. Given its low leverage, $237 million in cash on its balance sheet, and $38 million+ of equity free cash flow in 2013 based on our estimates, we think CCOI is set to return more capital to shareholders."
For an analyst ratings summary and ratings history on Cogent Communications click here. For more ratings news on Cogent Communications click here.
Shares of Cogent Communications closed at $22.03 yesterday, with a 52 week range of $12.63-$22.25.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
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