Cogeco Communications (CCA) AI Stock Analysis

• Market Cap: $2.81B
• Dividend Yield: 5.45%
• Average Volume (3M): 68.47K
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.44
• Revenue Growth: -0.76%
• EPS Growth: -1.21%
• Country: CA
• Employees: 3,854
• Sector: Communication Services
• Sector Strength: 73
• Industry: Telecommunications Services
• EPS (TTM): 1.82
• Shares Outstanding: 30,272,928
• 10 Day Avg. Volume: 117,576
• 30 Day Avg. Volume: 68,469
• PEG Ratio: -1.71
• Price to Book (P/B): 0.94
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.34
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $79.47
• Price Target Upside: 19.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 75 Outperform
• Price Target: C$73.00 ▲(9.81%Upside)

Cogeco Communications receives a solid score of 75, primarily driven by strong financial performance and attractive valuation. Despite bearish technical indicators, the stock's low P/E ratio and high dividend yield provide substantial value. While earnings call insights point to growth in Canada, challenges in the U.S. market and overall bearish technical indicators slightly weigh down the overall score.

Positive Factors

Financial Performance

Lower capex slightly boosted free cash flow.

Growth Initiatives

Cogeco initiated a small-scale wireless launch with full deployment expected in the fall.

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

Estimates and Targets

Estimates and target for Cogeco Communications have been lowered to reflect seismic issues.

Market Challenges

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.

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 its provision of telecommunication services, primarily by offering subscription-based cable television, high-speed internet, and telephony services to residential and business customers. The company's revenue model is based on a mix of monthly subscription fees, installation charges, and equipment rental fees. Key revenue streams include residential internet services, which constitute a significant portion of its earnings due to increasing demand for high-speed connectivity. Additionally, Cogeco earns from business services, offering data networking, hosting, and other telecom solutions to businesses. The company's earnings are also bolstered by strategic investments and partnerships with content providers and technology companies to enhance service offerings and maintain competitive pricing packages.

Cogeco Communications Financial Statement Overview

Summary

Cogeco Communications exhibits financial stability with strong profitability and efficient cash flow management. While the company faces moderate leverage, its robust EBITDA margins and cash flow generation provide a cushion against potential financial risks. The slight decline in revenue and free cash flow growth rates suggests the need for strategic initiatives to bolster growth.

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

Cogeco Communications Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 66.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 66.48 is below the 20-day moving average (MA) of 69.50, below the 50-day MA of 68.78, and below the 200-day MA of 66.48, indicating a bearish trend. The MACD of -0.92 indicates Positive momentum. The RSI at 40.90 is Neutral, neither overbought nor oversold. The STOCH value of 29.85 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	75 Outperform	$2.81B	8.56	10.54%	5.45%	-0.76%	-1.21%
Sector *	64 Neutral	€14.70B	-11.24	1.40%	3.86%	2.00%	1.26%
BCE	―	$22.31B	88.13	2.83%	0.45%	―	―
RCI	―	$18.81B	16.83	13.68%	0.16%	―	―
TU	―	$25.14B	28.98	7.51%	0.43%	―	―
CGO	69 Neutral	C$603.73M	6.79	10.54%	5.78%	-0.87%	9.49%
QBCRF	―	$6.84B	12.37	37.69%	0.12%	―	―

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.