Cogent Communications (CCOI) shares plunge 5.38% on mixed Q3 earnings and revised analyst outlooks

Cogent Communications (CCOI) shares plunged 5.3831% in pre-market trading on January 6, 2026, as investors reacted to mixed Q3 earnings results and revised analyst outlooks.

The stock’s decline followed a revenue miss of 5.9% year-over-year, with service revenue falling to $241.9 million, below the $246 million consensus. While adjusted EPS of ($0.87) narrowly beat estimates, analysts cut price targets by up to 33.76%, citing persistent top-line weakness and margin pressures. UBS and Wells Fargo trimmed targets to $27, reflecting reduced near-term optimism despite cost-cutting measures that narrowed losses.

Compounding concerns, Cogent’s traditional services continued to contract, with off-net revenue dropping 14.5%. However, the company announced a $0.02 quarterly dividend, signaling modest cash flow stability, and highlighted growth in high-margin wavelength services (92.5% YoY) and IPv4 leasing (55.5% YoY). A $144 million data center sale also provided capital to accelerate these strategic pivots.

Analysts remain divided, with a “Hold” consensus and an average $25.71 price target. The stock has fallen 45.7% since Q3 results, reflecting skepticism over execution risks and reliance on unproven growth segments. Market participants are now watching for evidence that wavelength services can scale to $500 million by 2028 to offset core declines.