Missing Earnings Impacted Cogent Communications Holdings (CCOI) Share Price

Alphyn Capital Management, an investment management firm, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Master Account of the fund returned 12.4% net in the second quarter compared to 10.9% for the S&P 500 Index. As of the second quarter of 2025, the top ten holdings accounted for approximately 65% of the portfolio, and approximately 17% of the portfolio was held in cash. Market conditions remained volatile in Q2 due to ongoing tariff developments and evolving interest rate projections. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, Alphyn Capital Management highlighted stocks such as Cogent Communications Holdings, Inc. (NASDAQ:CCOI). Cogent Communications Holdings, Inc. (NASDAQ:CCOI) provides high-speed Internet access, private network, and data center colocation space services. The one-month return of Cogent Communications Holdings, Inc. (NASDAQ:CCOI) was 5.15%, and its shares lost 23.98% of their value over the last 52 weeks. On July 11, 2025, Cogent Communications Holdings, Inc. (NASDAQ:CCOI) stock closed at $49.40 per share with a market capitalization of $2.437 billion.

Alphyn Capital Management stated the following regarding Cogent Communications Holdings, Inc. (NASDAQ:CCOI) in its second quarter 2025 investor letter:

“Cogent Communications Holdings, Inc.’s (NASDAQ:CCOI) share price was impacted following a couple of quarters of missing earnings, as investors lost patience with the length of time the Sprint wireline integration was taking. Although management has already captured the targeted $220m of cost savings, the integration work is still consuming time and operating expenses, and revenue has yet to inflect, leaving headline results soft and sentiment poor.

Behind the noise, the wavelength build-out is gathering momentum. The funnel now sits at 3,433 orders. Importantly, Cogent can activate new wavelength circuits in as little as two weeks, versus the three-to-nine-month lead times typical of Lumen, Zayo, and others, a speed advantage that should translate into share gains as the backlog converts. Cogent aims to ramp up to a sustained pace of approximately 500 installations per month by year-end. Wavelength ARPU is roughly $1,930, with incremental EBITDA margins of over 90%, thanks to minimal variable costs, implying a potential run-rate incremental cash flow of over $100 million within a year. If those installations and associated cash flow fail to materialize over the next quarter or two, I will exit the position. However, for now, the market’s focus on near-term integration headaches leaves ample upside once wave scale.”

In another article, we covered Cogent Communications Holdings, Inc. (NASDAQ:CCOI) and shared Recurve Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.