Cogeco Communications (CCA) AI Stock Analysis

• Market Cap: $2.68B
• Dividend Yield: 5.82%
• Average Volume (3M): 80.12K
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.43
• Revenue Growth: -0.76%
• EPS Growth: -1.21%
• Country: CA
• Employees: 3,854
• Sector: Communication Services
• Sector Strength: 92
• Industry: Telecommunications Services
• EPS (TTM): 1.82
• Shares Outstanding: 30,272,928
• 10 Day Avg. Volume: 59,722
• 30 Day Avg. Volume: 80,120
• PEG Ratio: -0.79
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 0.93
• P/FCF Ratio: 5.34
• Enterprise Value/Market Cap: 2.98
• Enterprise Value/Revenue: 2.71
• Enterprise Value/Gross Profit: 4.20
• Enterprise Value/Ebitda: 5.62
• 1Y Price Target: $75.94
• Price Target Upside: 19.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 61 Neutral
• Price Target: C$65.00 ▲(2.60% Upside)

Cogeco Communications' overall stock score reflects a solid financial position with strong operational margins and cash flow generation. However, technical indicators suggest bearish momentum, and challenges in the U.S. market impact the outlook. The stock's low P/E ratio and high dividend yield provide some valuation appeal, while the earnings call indicates potential for future growth in free cash flow and operational efficiencies.

Positive Factors

Business Strategy

Operations appear to be on the right track with a focus on synergies, digitization/analytics, network expansion, and wireless.

Free Cash Flow

Lower capex slightly boosted free cash flow.

Market Position

Cogeco Communications is considered one of the best smidcap ideas due to much higher free cash flow expected in the future and unlocking value through asset sales.

Negative Factors

Market Competition

The U.S. broadband market faced challenges with elevated competitive activity, resulting in a decline of 10k customers.

Revenue Guidance

F2025 revenue guidance was lowered due to U.S. competition.

Subscriber Metrics

Subscriber metrics were slightly below expectations.

Cogeco Communications Business Overview & Revenue Model

Company Description

Cogeco Communications Inc. operates as a communications corporation in North America. It operates in two segments, Canadian Broadband Services and American Broadband Services. The company offers Internet, video, and telephony services to residential and business customers through its two-way broadband fiber networks. It provides Internet services using modems, Wi-Fi gateways, and extenders either on a rental basis or as part of the Internet service package; video services on a subscription basis; home phone services using Internet protocol (IP); local and long-distance calling services; broadband Internet services; and IP based telephony services and other network connectivity services delivered over fiber optic connection to larger businesses. The company serves the primary service units, Internet, video, and telephony service customers. It offers cable operator services under the Cogeco Connexion name in Québec and Ontario, and in the United States under the Atlantic Broadband brand. The company was formerly known as Cogeco Cable Inc. and changed its name to Cogeco Communications Inc. in January 2016. Cogeco Communications Inc. was founded in 1972 and is headquartered in Montreal, Canada. Cogeco Communications Inc. operates as a subsidiary of Cogeco Inc.

How the Company Makes Money

Cogeco Communications generates revenue through multiple streams primarily centered around its telecommunications services. The main revenue sources include subscription fees from residential and business customers for high-speed internet, cable television, and phone services. Additionally, Cogeco Media contributes to the company's earnings through advertising revenue from its radio stations and media content. Key partnerships with content providers and technology companies enhance its service offerings and customer retention. The company also benefits from economies of scale, as a larger subscriber base allows for reduced operational costs per user, ultimately contributing to its profitability.

Cogeco Communications Financial Statement Overview

Summary

Cogeco Communications shows strong profitability with a robust EBITDA margin and efficient cash flow management. The slight decline in revenue and free cash flow growth rates suggests a need for strategic focus on market share expansion.

Income Statement

Cogeco Communications demonstrates consistent revenue generation with a slight decrease in TTM revenue compared to the previous year. The gross profit margin remains robust at 69.6% TTM, indicating strong cost management. However, the net profit margin decreased slightly to 11.0% TTM from 11.3%, which might suggest rising costs or competitive pressures. The EBITDA margin improved to 48.6% TTM, reflecting efficient operations. Despite stable EBIT margins, the slight decline in revenue growth indicates a need for strategic focus on capturing market share.

Balance Sheet

The company's balance sheet shows a solid equity position with an equity ratio of 31.3% TTM, indicating a healthy financial structure. The debt-to-equity ratio of 1.59 TTM suggests moderate leverage, which is typical for the telecommunications industry. Return on Equity (ROE) stands at 10.3% TTM, reflecting a reasonable return for shareholders. However, the high level of total debt remains a potential risk factor, underscoring the importance of maintaining strong cash flows to service debt obligations.

Cash Flow

Cogeco Communications has shown a strong operating cash flow of $1.12 billion TTM, highlighting robust cash generation capabilities. The free cash flow to net income ratio is 1.47 TTM, indicating efficient conversion of earnings into cash. However, a slight decline in free cash flow growth rate might signal challenges in capital expenditure management. Overall, the company maintains a strong cash flow position to support its financial obligations and potential investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.95B	2.98B	2.98B	2.90B	2.51B	2.38B
Gross Profit	1.90B	2.49B	932.42M	2.11B	1.63B	1.55B
EBITDA	1.42B	1.36B	1.39B	1.36B	1.20B	1.17B
Net Income	327.12M	335.53M	392.27M	423.30M	401.52M	375.17M
Balance Sheet
Total Assets	9.87B	9.68B	9.77B	9.28B	7.35B	6.80B
Cash, Cash Equivalents and Short-Term Investments	239.98M	76.33M	362.92M	370.90M	365.52M	366.50M
Total Debt	4.78B	4.82B	5.04B	4.68B	3.28B	3.12B
Total Liabilities	6.22B	6.20B	6.33B	6.09B	4.55B	4.16B
Stockholders Equity	3.13B	2.98B	2.96B	2.75B	2.42B	2.27B
Cash Flow
Free Cash Flow	589.76M	516.13M	100.08M	259.55M	426.86M	433.83M
Operating Cash Flow	1.19B	1.18B	962.90M	1.24B	1.02B	917.82M
Investing Cash Flow	-581.33M	-916.61M	-954.47M	-2.41B	-984.83M	-557.27M
Financing Cash Flow	-415.09M	-542.37M	-23.77M	981.92M	-27.41M	-547.10M

Cogeco Communications Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 63.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CCA, the sentiment is Negative. The current price of 63.35 is below the 20-day moving average (MA) of 63.38, below the 50-day MA of 66.42, and below the 200-day MA of 65.27, indicating a bearish trend. The MACD of -1.18 indicates Negative momentum. The RSI at 43.60 is Neutral, neither overbought nor oversold. The STOCH value of 76.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CCA.

Cogeco Communications Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCA	61 Neutral	$2.68B	8.16	10.54%	5.82%	-0.76%	-1.21%
Sector *	60 Neutral	$43.84B	1.71	-10.46%	3.98%	2.32%	-37.93%
BCE	―	$23.60B	87.17	2.91%	9.56%	―	―
RCI	―	$19.25B	17.32	13.68%	4.07%	―	―
TU	―	$25.02B	35.69	6.08%	7.01%	―	―
CGO	57 Neutral	C$573.75M	6.45	10.54%	6.31%	-0.87%	9.49%
QBCRF	―	$6.72B	12.22	33.80%	3.27%	―	―

Cogeco Communications Corporate Events

Cogeco Communications Reports Q3 2025 Results and Launches Canadian Wireless Service

Cogeco Communications reported its Q3 2025 financial results, highlighting robust growth in Canadian Internet customers and the launch of its wireless service in Canada, which is set to expand into 12 markets. Despite a decrease in revenue and adjusted EBITDA, the company achieved significant free cash flow and is optimistic about its wireless expansion as a strategic tool to retain and grow its customer base. The company is also addressing challenges in the U.S. market with new initiatives aimed at improving customer trends.

The most recent analyst rating on (TSE:CCA) stock is a Hold with a C$71.00 price target. To see the full list of analyst forecasts on Cogeco Communications stock, see the TSE:CCA Stock Forecast page.