UBS has reduced its 12-month price target on Cogent Communications Holdings Inc. (CCOI) to $21 from $27 but left its rating unchanged at Neutral, citing a decelerated ramp in the carrier ompany's waves business relative to prior assumptions. The equity has endured severe pressure over the last year, down about 75%, and was trading at $18.59, substantially below a 52-week peak of $82.
Operationally, Cogent's most recent reporting period showed total revenues down 0.6% sequentially and down 4.7% year-over-year. That compares with a 5.9% year-over-year revenue decline in the previous quarter. Reported EBITDA for the quarter reached $52 million; when including reimbursements from T-Mobile, EBITDA was $77 million. On a year-over-year basis, those figures represent increases of 24% and 15%, respectively.
For the trailing twelve months, Cogent recorded revenue of $896.57 million and EBITDA of $166.37 million. The company remains unprofitable on a GAAP basis, reporting an EPS of -$3.80 over the same period.
Management has highlighted a string of month-over-month revenue gains, noting five consecutive months of growth including January, and expects the business to return to sequential revenue growth in the first quarter and beyond. Management also points to expected EBITDA growth for the full year 2026.
UBS said it is largely keeping its 2026 forecasts intact, modeling flat revenues but projecting 15% reported EBITDA growth for the year. However, the bank revised its longer-term model to reflect a more gradual waves rollout. Under the updated assumptions, UBS now projects 2026 revenues of $973 million and reported EBITDA of $222 million, growing to approximately $1.07 billion in revenue and $302 million in reported EBITDA by 2028.
The revised growth trajectory implies a compound annual growth rate from 2025 to 2028 of roughly 3% for revenue and 16% for reported EBITDA, down from previous UBS estimates of 4% and 19% for the same period.
On the balance sheet and capital structure front, Cogent plans to refinance its 2027 unsecured notes later this year with secured debt. Management anticipates consolidated leverage to fall from 7.3 times in the fourth quarter to 6.7 times by year-end 2026, excluding proceeds from asset sales. The company reiterated that it will look to resume dividend growth once consolidated net leverage declines below 4 times.
Independent analysis referenced by the company notes a material debt burden, with Cogent carrying $2.67 billion in total debt. The company has, however, maintained a dividend for 15 consecutive years; the current dividend yield stands at approximately 0.43%.
Looking at the most recent reported quarter, Cogent posted a fourth-quarter 2025 EPS of -$0.64, beating the forecasted -$1.03 and delivering a positive surprise of 37.86%. Revenue for the quarter came in at $240.5 million, slightly below the $243.71 million analysts had expected. The revenue shortfall is a point of investor concern and contributed to a cautious tone among market watchers.
What this means
UBS djusted its valuation and growth assumptions to reflect a slower commercialization pace for a key business line while retaining a neutral view on the shares. The company shows signs of margin improvement and short-term revenue stabilization but continues to operate with substantial leverage and negative earnings.
Contextual notes - The data points above summarize recent results, UBSorecast revisions, management guidance on revenue and leverage, and third-party analysis on indebtedness and dividend history.