Cogent Communications Holdings Inc (NASDAQ: CCOI) shares fell 4.7% in premarket trading on Wednesday after JPMorgan downgraded the stock to Underweight from Neutral.
Analyst Sebastiano Petti cited slower installation rates and weaker-than-expected revenue and EBITDA performance following a disappointing quarter. The bank also reduced its price target for Cogent to $9.00 from $22.00, adjusting the horizon from December 2026 to December 2027.
The new $9 target implies a 2028 enterprise value-to-EBITDA multiple of 9.9x, compared with 8.1x for 2027 estimates at current levels. JPMorgan highlighted continued top-line pressure from the runoff of legacy Sprint contracts and execution challenges in the Waves business, where installation pace and customer adoption remain weak.
The firm also noted Cogent’s elevated leverage of 6.75x net debt-to-EBITDA, with negative free cash flow and no clear path to the company’s 4.0x leverage target despite ongoing asset sales. The data center monetization catalyst has largely played out, shifting investor focus to core operational and balance sheet risks.
