Investors should scoop Cogent Communications as it trades at a discount following a major sell-off to start the week and shows signs of bolstering its balance sheet, according to JPMorgan. The bank upgraded Cogent Communications to overweight from neutral. It lowered its price target on shares to $22 from $23, though that still implies 34% upside from Monday’s close. “Following Monday’s pullback, we upgrade Cogent to Overweight (from Neutral), driven by (1) a continued favorable mix shift toward On-Net and Waves revenue (+9% y/y in [the first quarter of 2026] on a combined basis) and (2) further progress on the sale of its data centers, which we believe will enable Cogent to reduce debt (on a gross and net basis) and refinance its 2027 unsecured notes,” analyst Sebastiano Petti said Tuesday in a note to clients. Shares plunged 29% lower on Monday after the internet service provider posted lackluster first-quarter earnings results. The company reported adjusted EBITDA of $70.2 million versus the $73.9 million expected by analysts polled by FactSet. Its revenue came in at $135.6 million, or slightly below a $136.6 million consensus estimate. CCOI 1D mountain Shares closed 29% lower on Monday. The stock’s steep decline “provides an attractive entry point,” according to Petti. He added that Cogent should be able to regain ground, particularly if it can close its expected sale of 10 data centers early this summer. Cogent CEO Dave Schaeffer said during the company’s earnings call on Monday that aggregate proceeds from that sale should come in at “substantially more than [the firm’s] $144 million” agreement to offload two of its data centers that was terminated in the first quarter for 2026. The executive also noted that his company will contribute the proceeds of its new expected deal to a borrower group to de-lever “both on a gross and net basis,” per Petti’s note. JPMorgan’s call goes against consensus on the Street. Of the 12 analysts covering Cogent, just four have a buy or strong buy on shares, while seven have a hold rating on the stock, LSEG data shows.
