TD Cowen has lowered its 12-month price target for Cogent Communications (NASDAQ:CCOI) to $40 from $52 but continues to rate the stock as Buy. The firm pointed to the company’s inability to complete the sale of data centers previously disclosed on an earnings call and to limited progress on Cogent’s Waves initiative as the rationale for the reduction.
The company’s most recent results were a mixed bag. Cogent’s fourth-quarter 2025 earnings per share came in at -0.64, outperforming consensus estimates of -1.03. However, revenue missed expectations, reporting $240.5 million versus the $243.71 million forecast. Total revenues declined 0.6% sequentially and 4.7% year-over-year.
Management reported EBITDA of $52 million for the quarter, rising to $77 million when including reimbursements from T-Mobile. Those figures represent year-over-year increases of 24% and 15%, respectively. Despite the EPS outperformance and EBITDA improvement, Cowen underscored that the previously announced letter of intent for a data center sale did not culminate in a completed transaction, a development that influenced its estimate revisions.
In addition to Cowen’s action, KeyBanc trimmed its price target to $25 from $30 while maintaining an Overweight rating, and UBS reduced its target to $21 from $27 while keeping a Neutral stance. UBS specifically cited a slower-than-expected ramp in the Waves business. These downward adjustments follow the company’s fourth-quarter disclosures and the unclosed data center deal.
Investors have already reacted to the company’s recent performance and outlook. Shares of Cogent had rallied more than 60% off November lows, but much of that advance has been reversed. At the time of reporting the stock was trading at $17.81, a decline of 30% over the past week and 75% below its 52-week high of $82.
Looking ahead, TD Cowen noted the importance of a planned refinancing in 2027. While the firm described such a refinancing as potentially costly, it would address immediate balance-sheet concerns and buy time for Cogent’s data center disposition efforts and the development of the Waves initiative to progress. This refinancing is particularly salient given Cogent’s $2.67 billion debt load.
Independent analysis from InvestingPro assigns Cogent a financial health score of "WEAK" and indicates the stock currently trades above its Fair Value estimate, implying limited upside from current levels. The combination of a heavy debt burden, unmet asset-sale expectations, and a Waves business that is not yet scaling as anticipated underpin the cautious analyst responses.
Summary
- TD Cowen lowered its price target to $40 from $52 while keeping a Buy rating, citing an uncompleted data center sale and limited Waves progress.
- Cogent beat EPS estimates for Q4 2025 but missed revenue expectations; EBITDA rose year-over-year, with a higher figure when including T-Mobile reimbursements.
- KeyBanc and UBS also trimmed price targets; the company faces a large debt load and a consequential 2027 refinancing.
Key points
- Analyst revisions - Multiple analysts have reduced price targets, reflecting investor concern about asset-sale execution and the pace of the Waves business ramp. Sector impact: telecommunications and data center services.
- Financials - Q4 2025 delivered an EPS beat but a revenue shortfall; EBITDA improved, helped by T-Mobile reimbursements. Sector impact: corporate credit and equity valuation in communications services.
- Balance-sheet pressure - A $2.67 billion debt burden and the prospect of a costly 2027 refinancing are central near-term considerations for creditors and investors. Sector impact: fixed-income and capital markets.
Risks and uncertainties
- Refinancing risk - The necessity of a 2027 refinancing, described as potentially expensive, introduces execution and cost risk for the company and affects bondholders and lenders.
- Asset-sale uncertainty - The failure to complete the data center sale after a public letter of intent raises the prospect that expected cash inflows may not materialize on the prior timeline, affecting liquidity and strategic plans.
- Operational ramp risk - Slower-than-expected progress in the Waves initiative could dampen revenue recovery and investor confidence, with implications for telecom services providers and related vendors.
These developments collectively reflect a mixed performance and outlook for Cogent Communications, combining pockets of operational improvement with unresolved strategic and balance-sheet challenges.