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Here's Why Cogent (CCOI) is a Promising Pick for Investors

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·3 min read
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Shares of Cogent Communications Holdings, Inc. CCOI have returned 22.3% in the past six months compared with 4.5% growth of the industry. The stock currently sports a Zacks Rank #1 (Strong Buy).



This Washington, DC-based company delivered a trailing four-quarter earnings surprise of 29%, on average. The Zacks Consensus Estimate for its current-year earnings has been revised 29.4% upward over the past 30 days.

Growth Drivers

Cogent provides low-cost, high-speed Internet access and private network services to bandwidth-intensive organizations. The company’s facilities-based, all-optical IP network provides services in more than 210 markets across 48 countries.

Cogent is benefiting from an increase in on-net customer connections. On-net service is provided to customers located in buildings that are physically connected to Cogent’s network by its facilities. Off-net customers are located in buildings directly connected to Cogent’s network using other carriers’ facilities.

The company offers a streamlined set of products, which helps in eliminating redundant costs and gives greater pricing flexibility. It incurs relatively lower costs compared with its competitors owing to the usage of Internet routers without additional legacy equipment.

Cogent’s network delivers high throughput, which reduces the frequency of data packets dropped during transmission compared with traditional circuit-switched networks. Operating as one of the most interconnected Tier 1 networks in the world, the company provides efficient on-network and off-network connectivity solutions to various enterprises.

It offers state-of-the-art colocation data center services that provide incessant power supply and backup generators. Cogent boasts a high traffic network footprint across major multi-tenant office buildings in North American cities and carrier-neutral colocation centers in North America and Europe.

Cogent’s interconnected network gives a competitive edge over its rivals, which helps in augmenting its revenue-generating opportunities and margins. It has several growth drivers in place and enjoys a strong foothold in its served markets. So, it is rational to believe that the stock has more upside left.

Other Key Choices

Some other top-ranked stocks that investors may consider are United States Cellular Corporation USM, Vicor Corporation VICR and Altice USA, Inc. ATUS, each flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

U.S. Cellular delivered a trailing four-quarter earnings surprise of 123.9%, on average.

Vicor delivered a trailing four-quarter earnings surprise of 80.6%, on average.

Altice delivered a trailing four-quarter earnings surprise of 61.5%, on average.

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United States Cellular Corporation (USM) : Free Stock Analysis Report

Cogent Communications Holdings, Inc. (CCOI) : Free Stock Analysis Report

Altice USA, Inc. (ATUS) : Free Stock Analysis Report

Vicor Corporation (VICR) : Free Stock Analysis Report

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