KeyBanc Lowers Cogent Communications (CCOI) Valuation After Disappointing Quarter

Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is included among the 13 Most Promising Long-Term Stocks to Buy According to Hedge Funds.

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On February 23, KeyBanc analyst Brandon Nispel lowered the price recommendation on Cogent Communications Holdings, Inc. (NASDAQ:CCOI) to $25 from $30. He reiterated an Overweight rating on the shares. The analyst said the change reflects lower estimates following weaker-than-expected Q4 results. He also noted that a previously announced letter of intent to sell data center assets did not lead to a completed transaction. This development contributed to the stock’s negative reaction.

During the company’s Q4 2025 earnings call, CEO David Schaeffer spoke about progress on margins. He said margin expansion came from cost-cutting efforts and a greater focus on higher-margin on-net products. These services now make up a larger share of the company’s business. On-net revenue increased to 61% of total revenue in the latest quarter, up from 47% in the third quarter of 2023. At the same time, off-net revenue declined to 39%. Noncore revenue dropped to less than 1% of total revenue. Schaeffer said this reflects the company’s intentional shift toward more profitable services.

He also highlighted strong growth in the wavelength business. The network expanded to 1,096 locations. Quarterly wavelength revenue reached $12.1 million, up 74% from the prior year. For the full year, wavelength revenue rose to $38.5 million, which he said had doubled compared with 2024. Schaeffer also discussed efforts to strengthen the balance sheet. He said the company improved its leverage profile and plans to refinance $750 million in unsecured notes with secured debt after the make-whole period ends in June 2026.

He added that Cogent continues to pursue the sale of 24 surplus data centers as part of its asset optimization plan. Discussions with potential buyers are ongoing after an earlier letter of intent fell through due to financing conditions.

Cogent Communications Holdings, Inc. (NASDAQ:CCOI) operates as a biotechnology company focused on developing precision therapies for genetically defined diseases.

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