All You Need to Know About Cogent (CCOI) Rating Upgrade to Buy

Core Viewpoint - Cogent Communications (CCOI) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements, particularly due to institutional investors' reliance on these estimates for valuation [3][5]. - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional investors to buy or sell, thus affecting stock prices [3]. Cogent's Earnings Outlook - The recent upgrade for Cogent reflects an improvement in its underlying business, with rising earnings estimates expected to drive the stock price higher [4]. - For the fiscal year ending December 2024, Cogent is projected to earn -$4.57 per share, a change of -117.2% from the previous year, but the Zacks Consensus Estimate has increased by 21.1% over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The upgrade of Cogent to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].