NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the ratings report include:
- CCOI's revenue growth has slightly outpaced the industry average of 6.9%. Since the same quarter one year prior, revenues rose by 13.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- COGENT COMMUNICATIONS GRP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COGENT COMMUNICATIONS GRP increased its bottom line by earning $0.17 versus $0.02 in the prior year. This year, the market expects an improvement in earnings ($0.39 versus $0.17).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 109.9% when compared to the same quarter one year prior, rising from $2.58 million to $5.42 million.
- The gross profit margin for COGENT COMMUNICATIONS GRP is rather high; currently it is at 57.60%. It has increased from the same quarter the previous year.
- Net operating cash flow has increased to $27.29 million or 24.25% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.75%.
Cogent Communications Group, Inc., together with subsidiaries, provides high-speed Internet access, Internet protocol, and communications services to small and medium-sized businesses, communications service providers, and other bandwidth-intensive organizations. The company has a P/E ratio of 180.4, above the average telecommunications industry P/E ratio of 151.5 and above the S&P 500 P/E ratio of 17.7. Cogent Communications Group has a market cap of $694.5 million and is part of the
industry. Shares are up 4.5% year to date as of the close of trading on Thursday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet RatingsStaff