What Happened?
Shares of internet service provider Cogent Communications (NASDAQ:CCOI) jumped 3.2% in the afternoon session after the company announced a $100 million increase to its stock buyback program and a hike in its quarterly dividend. The company's board approved the $100 million increase to its buyback program, a move often interpreted as a sign that management believes its shares are undervalued. This authorization allows the company to repurchase up to 4.6% of its stock.
After the initial pop the shares cooled down to $31.97, up 4.4% from previous close.
Is now the time to buy Cogent? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Cogent’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 14% on the news that it reported weak second-quarter results that missed Wall Street's expectations for both revenue and earnings. The company's revenue fell 5.5% year-over-year to $246.2 million, while its loss per share of $1.21 was nearly 30% worse than analysts had anticipated. The disappointing results highlighted several underlying issues for investors. Cogent's cash burn worsened, with the company using $100.2 million in cash during the quarter, a significant increase from the same period last year. Furthermore, the report pointed to a concerning balance sheet, with over $2.3 billion in debt compared to just $306.7 million in cash, raising questions about the company's financial stability.
Cogent is down 58.5% since the beginning of the year, and at $31.97 per share, it is trading 62.5% below its 52-week high of $85.35 from November 2024. Investors who bought $1,000 worth of Cogent’s shares 5 years ago would now be looking at an investment worth $471.98.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.