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Why Is Cogent (CCOI) Up 2.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Cogent Communications (CCOI - Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cogent due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cogent Q1 Earnings & Revenues Top Estimates, Rise Y/Y
Cogent reported healthy first-quarter 2021 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate.
Net Income
Net income in the March quarter was $18.9 million or 41 cents per share compared with $9.2 million or 20 cents per share in the prior-year quarter. The improvement primarily resulted from higher operating income and foreign exchange gain of $18.9 million on Cogent’s 2024 euro notes. Also, the bottom line beat the Zacks Consensus Estimate by 23 cents.
Revenues
Quarterly service revenues increased 4.2% year over year to $146.8 million, driven by higher on-net revenues, along with a positive impact of foreign exchange. Also, the top line surpassed the consensus estimate of $144 million.
On-net revenues grew 6.3% year over year to $109.9 million, reflecting an increase in on-net customer connections. On-net service is provided to customers located in buildings that are physically connected to Cogent’s network by its facilities.
Off-net revenues declined 1.6% to $36.7 million. Off-net customers are located in buildings directly connected to Cogent’s network using other carriers’ facilities.
Other Details
Total operating expenses were $120.5 million compared with $115.1 million in the prior-year quarter. Operating income was $26.3 million, up from $25.9 million. EBITDA totaled $55.6 million compared with $50.4 million in the year-ago quarter with respective margins of 37.8% and 35.8%.
Total customer connections grew 4.3% year over year to 90,925 on Mar 31, 2021.
Cogent increased its dividend for the 35th consecutive quarter. It increased its quarterly dividend by 2.5 cents per share to 78 cents for the second quarter of 2021. The amount is payable on May 28 to shareholders on record as of May 14.
Cash Flow & Liquidity
During the first quarter of 2021, Cogent generated $47.1 million of net cash from operating activities compared with $28.5 million in the year-ago quarter.
As of Mar 31, 2021, the company had $238 million in cash and cash equivalents with $202.5 million of finance lease obligations compared with the respective tallies of $371.3 million and $203.4 million at the end of the previous quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 13.08% due to these changes.
VGM Scores
Currently, Cogent has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cogent has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Cogent (CCOI) Up 2.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Cogent Communications (CCOI - Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cogent due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cogent Q1 Earnings & Revenues Top Estimates, Rise Y/Y
Cogent reported healthy first-quarter 2021 results, wherein both the bottom line and the top line beat the respective Zacks Consensus Estimate.
Net Income
Net income in the March quarter was $18.9 million or 41 cents per share compared with $9.2 million or 20 cents per share in the prior-year quarter. The improvement primarily resulted from higher operating income and foreign exchange gain of $18.9 million on Cogent’s 2024 euro notes. Also, the bottom line beat the Zacks Consensus Estimate by 23 cents.
Revenues
Quarterly service revenues increased 4.2% year over year to $146.8 million, driven by higher on-net revenues, along with a positive impact of foreign exchange. Also, the top line surpassed the consensus estimate of $144 million.
On-net revenues grew 6.3% year over year to $109.9 million, reflecting an increase in on-net customer connections. On-net service is provided to customers located in buildings that are physically connected to Cogent’s network by its facilities.
Off-net revenues declined 1.6% to $36.7 million. Off-net customers are located in buildings directly connected to Cogent’s network using other carriers’ facilities.
Other Details
Total operating expenses were $120.5 million compared with $115.1 million in the prior-year quarter. Operating income was $26.3 million, up from $25.9 million. EBITDA totaled $55.6 million compared with $50.4 million in the year-ago quarter with respective margins of 37.8% and 35.8%.
Total customer connections grew 4.3% year over year to 90,925 on Mar 31, 2021.
Cogent increased its dividend for the 35th consecutive quarter. It increased its quarterly dividend by 2.5 cents per share to 78 cents for the second quarter of 2021. The amount is payable on May 28 to shareholders on record as of May 14.
Cash Flow & Liquidity
During the first quarter of 2021, Cogent generated $47.1 million of net cash from operating activities compared with $28.5 million in the year-ago quarter.
As of Mar 31, 2021, the company had $238 million in cash and cash equivalents with $202.5 million of finance lease obligations compared with the respective tallies of $371.3 million and $203.4 million at the end of the previous quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 13.08% due to these changes.
VGM Scores
Currently, Cogent has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Cogent has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.