Cogent (CCOI) Reliance on International Sales: What Investors Need to Know

Zacks Equity Research

Tue, May 13, 2025, 7:16 AM 5 min read

Have you evaluated the performance of Cogent Communications' (CCOI) international operations during the quarter that concluded in March 2025? Considering the extensive worldwide presence of this internet service provider, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.

In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

While analyzing CCOI's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.

The company's total revenue for the quarter stood at $247.05 million, declining 7.2% year over year. Now, let's delve into CCOI's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

A Dive into CCOI's International Revenue Trends

Africa accounted for 0.06% of the company's total revenue during the quarter, translating to $0.14 million. Revenues from this region represented a surprise of -13.75%, with Wall Street analysts collectively expecting $0.16 million. When compared to the preceding quarter and the same quarter in the previous year, Africa contributed $0.14 million (0.06%) and $0.19 million (0.07%) to the total revenue, respectively.

During the quarter, Europe contributed $29 million in revenue, making up 11.74% of the total revenue. When compared to the consensus estimate of $28.09 million, this meant a surprise of +3.24%. Looking back, Europe contributed $29.26 million, or 11.60%, in the previous quarter, and $29.1 million, or 10.93%, in the same quarter of the previous year.

Oceania generated $6 million in revenues for the company in the last quarter, constituting 2.43% of the total. This represented a surprise of +6.42% compared to the $5.64 million projected by Wall Street analysts. Comparatively, in the previous quarter, Oceania accounted for $5.97 million (2.36%), and in the year-ago quarter, it contributed $5.97 million (2.24%) to the total revenue.

Revenue Forecasts for the International Markets

The current fiscal quarter's total revenue for Cogent, as projected by Wall Street analysts, is expected to reach $249.1 million, reflecting a decline of 4.4% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Africa is anticipated to contribute 0.1% or $0.15 million, Europe 11.4% or $28.39 million and Oceania 2.3% or $5.67 million.

For the full year, the company is expected to generate $1.01 billion in total revenue, down 2.9% from the previous year. Revenues from Africa, Europe and Oceania are expected to constitute 0.1% ($0.61 million), 11.4% ($114.83 million) and 2.3% ($23.01 million) of the total, respectively.

Key Takeaways

Cogent's leaning on foreign markets for its revenue stream presents a mix of chances and challenges. Therefore, a vigilant watch on its international revenue movements can greatly aid in projecting the company's future direction.

In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.

Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.

The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.

Cogent, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Examining the Latest Trends in Cogent's Stock Value

Over the past month, the stock has seen a decline of 4.8% in its value, whereas the Zacks S&P 500 composite has posted an increase of 9.1%. The Zacks Computer and Technology sector, Cogent's industry group, has ascended 11.9% over the identical span. In the past three months, there's been a decline of 38.4% in the company's stock price, against a fall of 3.1% in the S&P 500 index. The broader sector has declined by 6.8% during this interval.

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This article originally published on Zacks Investment Research (zacks.com).

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