On Monday, Cogent Communications Holdings Inc (NASDAQ:CCOI) received a price target increase from Citigroup analyst Michael Rollins.
While wavelengths remain a longer-term growth opportunity, the company has fallen behind schedule, according to BofA Securities.
Analyst David Barden downgraded the rating for Cogent Communications from Neutral to Underperform, while cutting the price target from $75 to $65.
The Cogent Communications Thesis: The Sprint Wireline acquisition was completed more than a year ago, but the company "remains deeply immersed in the Sprint network integration," falling well behind schedule in monetizing the wavelength opportunity, Barden said in the downgrade note.
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Wavelength sales of $3.3 million in the first quarter and of $3.6 million in the second quarter came below Street estimates and "well below management's targets shared at the Sprint network acquisition closing," he added.
"Management originally believed it could achieve a $20mn wavelength sales run-rate by 4Q24 but withdrew this guidance as provisioning times for wavelength services remained elongated due to (surmountable) engineering complexities," the analyst wrote.
A positive inflection point for the business is likely to take place only in the back half of 2025, Barden stated.
CCOI Price Action: Shares of Cogent Communications were down 2.82% to $72.62 at the time of publication on Wednesday.
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