Cogent Communications Holdings, Inc. (CCOI): A Bull Case Theory

Core Thesis - Cogent Communications Holdings, Inc. is experiencing a bullish outlook despite recent challenges, with a focus on capital discipline and strategic asset monetization [1][6]. Financial Performance - As of December 2nd, CCOI's share price was $19.99, with trailing and forward P/E ratios of 94.04 and 5.00k respectively [1]. - The company recently cut its quarterly dividend from $1.01 to $0.02 to preserve capital while managing the $20 billion T-Mobile/Sprint fiber acquisition [2]. - The current stock price is $23.49, presenting a compelling risk/reward opportunity supported by operational momentum and strategic asset monetization [5]. Strategic Initiatives - The integration of T-Mobile/Sprint assets is progressing well, with EBITDA improving as operational efficiencies are realized [3]. - Cogent's data center portfolio expanded from 53 to 100 facilities post-acquisition, with plans to sell or lease 24 redundant centers, generating initial agreements worth $144 million [4]. - These divestitures are expected to accelerate deleveraging and unlock significant shareholder value once debt levels normalize [4]. Market Reaction - The market reacted sharply to the earnings call, primarily due to the dividend cut and suspension of share buybacks, but the company is focused on long-term capital discipline [2][6]. - Despite a 72.62% depreciation in stock price since previous coverage, the bullish thesis remains intact as efficiency gains progress [6].