Cogent's Progress Remains Disappointing
Cogent's narrow focus served it well for most of the past 20 years, but the 2023 acquisition of Sprint assets has strained the business. The Sprint business brought a long-distance data network that increases the range of services Cogent can offer, but also included several unprofitable customer agreements that Cogent has had to work through. Clear signs of accelerating growth haven't materialized, and Cogent is generating very little cash flow, even with payments from T-Mobile that run through 2027. We believe the firm can return to solid profitability while selling additional assets to help the balance sheet, but the road ahead will be challenging.
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