KeyBanc has reiterated an Overweight rating on Cogent Communications Holdings Inc., assigning a $30.00 price target while the stock trades around $26.46. According to a Fair Value model, current market pricing is judged to be fair even though the shares have dropped by more than 65% over the last year.
The research house flagged the potential for modest downside to expectations for the fourth quarter, but maintained a constructive long-term stance. With the company scheduled to report fourth-quarter results on February 20 - three days from now - investors will soon receive updated clarity on near-term operating performance.
KeyBanc highlighted several operational trends that underpin its optimism. The analyst emphasized that the overall trajectory of revenue growth appears to be improving, driven in particular by growth in the core business of on-net connection additions. The firm also anticipates that wavelength installations will show quarter-over-quarter improvement while backlog levels continue to rise. Those factors are cited as important signals of an improving top-line outlook even as reported revenue has declined 7.05% over the trailing twelve months.
Another element noted by the analyst is the status of a previously disclosed data center sale, which the report expects to transition from a non-binding letter of intent to a signed purchase agreement. Such a development could materially affect the company’s balance sheet dynamics given a notable debt position - total debt stood at $2.66 billion in the most recently reported quarter.
KeyBanc also drew attention to changes in executive incentives. The firm said the new chief executive officer contract aligns management incentives with a heightened sense of urgency to execute on strategic priorities. In its commentary, the research team wrote: "Playing the Long Game; We remain OW CCOI though see modest downside to 4Q expectations. That being said, we think what ultimately matters is: 1) the overall trajectory of revenue growth is improving, particularly in the core business on-net connection adds; 2) wavelength installs improve q/q while backlog continues to increase; and 3) the previously disclosed Data Center sale moves from non-binding LOI to signed purchase agreement. With new CEO contract, incentives should be well aligned with a sense of urgency to execute."
Separately, the company’s board has authorized a resumption of share repurchases, giving management discretion to buy back stock. The board’s approval did not specify a repurchase amount, and the company indicated management will retain flexibility to determine timing and scale based on market and economic conditions.
KeyBanc reiterated that 2025 has brought substantial headwinds for the telecommunications provider, but the firm expressed a comparatively more optimistic outlook for 2026 than other analysts. Those views feed into the investment house’s continued Overweight stance and its maintained price target.
Investors monitoring Cogent will be watching next week’s earnings release for confirmation of the trends KeyBanc outlined - revenue trajectory, wavelength installation momentum, backlog progression, and any material advancement on the data center sale. Together with the restarted buyback program and management’s new incentive structure, these items form the immediate set of catalysts that could influence sentiment toward the shares.
Clear summary
KeyBanc reaffirmed an Overweight rating and a $30.00 target on Cogent Communications as the firm sees improving revenue trends despite recent declines, an expected move toward a signed data center sale, and a restarted share buyback program - all against a backdrop of meaningful outstanding debt and an imminent Q4 report.