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Cogeco Inc. SV (TSE:CGO)
TSX:CGO
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Cogeco Inc. SV
(TSX:CGO)
66Neutral
Cogeco Inc. SV (CGO) vs. S&P 500 (SPY)
Market Cap
C$608.27M
Dividend Yield5.79%
Average Volume (3M)20.21K
Price to Earnings (P/E)6.9
Beta (1Y)0.62
Revenue Growth0.06%
EPS Growth115.11%
CountryCA
Employees4,400
SectorCommunication Services
Sector Strength84
IndustryTelecommunications Services
Share Statistics
EPS (TTM)2.11
Shares Outstanding8,040,562
10 Day Avg. Volume16,827
30 Day Avg. Volume20,212
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$84.50Price Target Upside33.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Cogeco Inc. SV Business Overview & Revenue Model
Company DescriptionCogeco Inc. is a diversified telecommunications and media company based in Canada. The company operates through two primary sectors: Cogeco Connexion and Cogeco Media. Cogeco Connexion provides residential and business customers with a wide range of telecommunications services, including cable television, internet, and telephony services, primarily in Quebec and Ontario. Cogeco Media operates radio stations across Quebec, offering entertainment and information content to a broad audience.
How the Company Makes MoneyCogeco Inc. generates revenue through several key streams. The primary source of income is from its telecommunications services offered by Cogeco Connexion. This includes subscription fees from cable television, internet, and telephony services provided to residential and business customers. Additional revenue comes from equipment rentals and installation services. Cogeco Media contributes to the company's earnings through advertising sales across its numerous radio stations. Significant partnerships with content providers, technology companies, and local advertisers also play an essential role in driving revenue. Strategic investments in infrastructure and technology further enhance service offerings, supporting customer retention and acquisition, which are critical factors in sustaining and growing the company's earnings.
Cogeco Inc. SV Financial Statement Overview
Summary
Cogeco Inc. shows strong operational efficiency with healthy EBIT and EBITDA margins. However, it faces challenges with low net income margins and slowing revenue growth. The balance sheet is heavily leveraged, presenting potential risks despite stable asset management. Cash flow generation is robust, yet recent declines in free cash flow warrant attention. Overall, the company reflects a mix of strengths in operational metrics but faces risks due to high leverage and declining profitability.Income Statement
The TTM (Trailing-Twelve-Months) gross profit margin stands at 64.35%, indicating robust profitability. However, the net profit margin is relatively low at 2.81%, reflecting challenges in translating revenue into net income. The revenue growth rate has been sluggish, with a slight decline in recent periods. EBIT and EBITDA margins are healthy, suggesting operational efficiency, but the decreasing net income signals potential concerns.―
Balance Sheet
The company's debt-to-equity ratio of 6.04 indicates high leverage, which could pose financial risks. The return on equity (ROE) is modest at 9.96%, showing decent but not outstanding returns for shareholders. The equity ratio of 8.44% is low, suggesting a reliance on debt financing. Overall, the balance sheet reflects a stable but highly leveraged financial position.65
Cash Flow
The operating cash flow to net income ratio of 13.00 is strong, underscoring effective cash generation relative to earnings. However, the free cash flow growth rate has been negative recently, which may impact future financial flexibility. The free cash flow to net income ratio of 3.16 reveals some room for improvement in converting earnings to free cash flow.―
| Breakdown | ||||
| Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.07B | 3.08B | 3.00B | 2.60B | 2.48B | Gross Profit |
| 904.15M | 928.87M | 897.14M | 1.23B | 1.17B | EBIT |
| 776.39M | 817.47M | 777.22M | 711.79M | 667.70M | EBITDA |
| 1.37B | 1.32B | 1.37B | 1.22B | 1.18B | Net Income Common Stockholders |
| 96.75M | 70.63M | 457.75M | 439.01M | 401.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 77.75M | 334.59M | 251.15M | 368.43M | 406.11M | Total Assets |
| 9.77B | 9.87B | 9.47B | 7.54B | 7.02B | Total Debt |
| 4.98B | 5.11B | 4.75B | 3.33B | 3.23B | Net Debt |
| 4.90B | 4.78B | 4.50B | 2.97B | 2.83B | Total Liabilities |
| 6.39B | 6.43B | 6.20B | 4.64B | 4.32B | Stockholders Equity |
| 810.44M | 925.86M | 919.84M | 816.66M | 761.50M |
| Cash Flow | Free Cash Flow | |||
| 521.15M | 101.98M | 274.75M | 436.05M | 454.39M | Operating Cash Flow |
| 1.19B | 968.21M | 1.26B | 1.03B | 941.63M | Investing Cash Flow |
| -848.34M | -957.88M | -2.41B | -986.24M | -560.50M | Financing Cash Flow |
| -620.09M | -32.84M | 970.90M | -73.41M | -530.95M |
Cogeco Inc. SV Technical Analysis
Positive
63.08
Price Trends
60.03
Positive
57.66
Positive
56.56
Positive
Market Momentum
1.07
Negative
60.54
Neutral
60.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CGO, the sentiment is Positive. The current price of 63.08 is above the 20-day moving average (MA) of 60.49, above the 50-day MA of 60.03, and above the 200-day MA of 56.56, indicating a bullish trend. The MACD of 1.07 indicates Negative momentum. The RSI at 60.54 is Neutral, neither overbought nor oversold. The STOCH value of 60.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CGO.
Cogeco Inc. SV Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $8.73B | 11.64 | 38.85% | 3.47% | 3.76% | 14.27% | |
79 Outperform | C$8.73B | 11.85 | 38.49% | 3.46% | 3.76% | 14.27% | |
74 Outperform | $2.84B | 8.49 | 10.84% | 5.29% | 0.21% | -6.81% | |
74 Outperform | $19.36B | 10.68 | 16.65% | 5.65% | 1.50% | 193.09% | |
66 Neutral | C$608.27M | 6.90 | 10.38% | 5.79% | 0.06% | 115.11% | |
59 Neutral | $13.74B | 7.33 | -2.74% | 3.82% | 2.18% | -37.91% | |
57 Neutral | $27.39B | 165.30 | 1.80% | 13.29% | -1.07% | -92.15% |
* Communication Services Sector Average
Performance Comparison
TSE:CGO
Cogeco Inc. SV
64.12
13.80
27.42%
TSE:BCE
BCE
29.38
-12.42
-29.71%
TSE:CCA
Cogeco Communications
68.18
14.79
27.71%
TSE:QBR.B
Quebecor
37.79
10.18
36.90%
TSE:RCI.B
Rogers Communication
35.26
-16.07
-31.31%
TSE:QBR.A
Quebecor Inc Cl A MV
38.00
9.77
34.61%
Cogeco Inc. SV Earnings Call Summary
Earnings Call Date:Apr 09, 2025
(Q2-2025)
| % Change Since: 6.59%|
Next Earnings Date:Jul 10, 2025
Earnings Call Sentiment Neutral
The call presented a mixed picture with significant operational highlights and strategic advancements, particularly in the wireless segment and cost management. However, the revenue decline and challenges in certain segments like radio advertising and subscriber base contractions were notable lowlights. The sentiment is balanced between optimism for future growth and current operational challenges.Q2-2025 Updates
Positive Updates
Expansion of EBITDA Margins
Transformation efforts contributed to the expansion of consolidated EBITDA margins. Operational performance was ahead of expectations due to well-executed plans and deferred investments.
Increase in Internet Subscriber Base
In Canada, the internet customer base grew by 8,300 subscribers during the quarter. The fiber-to-the-home expansion program added nearly 7,000 new homes passed.
Stable EBITDA in Breezeline
Despite revenue pressures, Breezeline's constant currency EBITDA remained stable due to cost reduction initiatives and operating efficiencies.
Free Cash Flow Increase
Free cash flow in constant currency increased by 12.8%, driven by lower capital expenditures and financial expenses.
Wireless Ramp Up
U.S. wireless volumes are ramping up, and Canadian pre-registrations exceeded expectations, supporting the company's wireless strategy.
Negative Updates
Revenue Decline
Cogeco Communications' consolidated revenue declined by 2.7%. Revenue in both the U.S. and Canadian segments decreased due to competitive pressures and subscriber base decline.
Gaming Revenue Decline
Revenue decline in Breezeline was attributed to a 4.5% decrease in constant currency due to the cumulative decline in the subscriber base, especially for entry-level services.
Decline in EPS
Diluted earnings per share declined by 20% in reported currency due to higher D&A expenses, acquisition integration and restructuring expenses, and higher taxes.
Challenges in Radio Advertising
Cogeco Media faced ongoing challenges in the radio advertising market, although digital advertising solutions contributed positively.
Company Guidance
During the Cogeco Inc. and Cogeco Communications Inc. Q2 2025 earnings call, several key metrics and strategic guidance points were discussed. The company is focusing on increasing free cash flow over the next two years, which is expected to grow significantly due to the completion of CapEx investment cycles in rural network builds and network modernization efforts. Cogeco is also maintaining a relatively low dividend payout ratio to sustain dividend growth. In Q2, the company's transformation program contributed to expanded EBITDA margins, with their fibre-to-the-home expansion adding around 7,000 new homes passed, primarily in Canada. The Canadian internet customer base grew by 8,300 subscribers, and the Ontario network expansion is set to continue through fiscal 2025, with completion expected by fiscal 2026. Consolidated revenue declined by 2.7%, while EBITDA remained stable in constant currency. Free cash flow increased by 12.8% due to lower capital expenditures and financial expenses. The net debt-to-adjusted EBITDA ratio was stable at 3.4 turns. For fiscal year 2025, Cogeco maintains its guidance, expecting consolidated revenue and adjusted EBITDA to decrease in the low single digits for Q3, with capital intensity anticipated to be approximately 350 basis points above Q3 of the previous year.Cogeco Inc. SV Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Cogeco Inc. Reports Q2 Fiscal 2025 Results Amid Ongoing Transformation
Neutral
Apr 9, 2025
Cogeco Inc. reported its financial results for the second quarter of fiscal 2025, highlighting the progress of its three-year transformation program aimed at increasing agility and competitiveness. Despite stable revenue, the company experienced a decline in profit, attributed to challenges in the telecommunications segments in both Canada and the U.S. and a competitive radio advertising market. However, customer satisfaction improved, and the company maintained its fiscal 2025 financial guidelines, declaring an 8% increase in quarterly dividends. The Canadian wireless launch is on track, and digital advertising continues to contribute to revenue growth.
Spark’s Take on TSE:CGO Stock
According to Spark, TipRanks’ AI Analyst, TSE:CGO is a Outperform.
Cogeco Inc. SV’s overall score is bolstered by strong operational efficiency and attractive valuation metrics. However, high leverage, revenue growth challenges, and mixed earnings call outcomes temper the outlook. The stock’s technical indicators show mixed signals, with short-term momentum but potential bearish trends.
To see Spark’s full report on TSE:CGO stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.