Cogent Communications shares fell 5.1% in pre-market trading after JPMorgan downgraded the stock to Underweight from Neutral and reduced its price target to $9 from $22, extending the horizon to December 2027.
The new target of $9 aligns with the company’s 52-week low, a sharp retreat from the 52-week high of $45.69. The downgrade follows the release of Q2 2026 results on August 6, which showed a 4.3% year-over-year decline in revenue to $235.6 million, missing consensus estimates.
JPMorgan cited slower-than-anticipated wave-installation progress, continued erosion from legacy Sprint wireline contract runoff and execution challenges in the Waves segment, where customer acceptance of installed wavelengths has lagged expectations. The bank also highlighted softer revenue and EBITDA performance alongside elevated net leverage of approximately 6.75x, noting the absence of a clear path to the company’s targeted 4.0x leverage ratio even after ongoing asset sales.
The broader U.S. equity market showed little movement, with the S&P 500 up 0.1%, the Dow essentially flat and the NASDAQ gaining 0.1%, indicating the sell-off was company-specific. Cogent Communications is also facing an active securities class action lawsuit related to wavelength demand disclosures.
