Shareholders might have noticed that Cogent Communications Holdings, Inc. (NASDAQ:CCOI) filed its quarterly result this time last week. The early response was not positive, with shares down 3.1% to US$54.09 in the past week. Things were not great overall, with a surprise (statutory) loss of US$0.11 per share on revenues of US$142m, even though the analysts had been expecting a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Cogent Communications Holdings from 14 analysts is for revenues of US$596.1m in 2021 which, if met, would be a notable 8.5% increase on its sales over the past 12 months. Per-share earnings are expected to soar 155% to US$1.13. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$599.6m and earnings per share (EPS) of US$1.13 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With no major changes to earnings forecasts, the consensus price target fell 7.8% to US$68.20, suggesting that the analysts might have previously been hoping for an earnings upgrade. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Cogent Communications Holdings, with the most bullish analyst valuing it at US$90.00 and the most bearish at US$45.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Cogent Communications Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 8.5% revenue growth noticeably faster than its historical growth of 6.7%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.5% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Cogent Communications Holdings to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Cogent Communications Holdings analysts - going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 5 warning signs for Cogent Communications Holdings (2 make us uncomfortable!) that you need to take into consideration.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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