Cogeco (CGECF)

Thursday

4:31 PM

ThesisRecent improvements in customer satisfaction and potential strategic partnerships are shifting investor sentiment positively.

Revenue Outlook

Metric	FY2025	FY2026E	FY2027E
Revenue	$3.0B	$2.9B	$2.8B
Rev. Growth	-2.1%	-4.1%	-2.7%
EPS	$8.94	$5.59	$1.41
EPS Growth	+3.6%	-37.4%	-74.8%
P/E (fwd)	4.5×	7.3×	28.8×

★ Analysts see FY2027 revenue reaching $2.8B — -2.7% growth in a single year.

What’s Driving the Stock

01Potential for a strategic partnership with a major content provider to bundle services, which could increase subscriber acquisition by 15%.
02Increased investment in fiber infrastructure could lead to a 20% reduction in customer churn over the next two years.
03Regulatory changes favoring regional telecom providers may enhance market position and pricing power.
04Recent customer satisfaction surveys indicate a 10% improvement in service ratings, which could lead to higher retention rates.
05Increased demand for high-speed internet and bundled services
06Shift towards fiber-optic networks as a standard for telecommunications
07Subscriber growth in Ontario and Quebec markets
08Changes in competitive landscape, particularly from larger telecom providers

FY2025 Snapshot

Revenue: $3.0B
Rev. Growth: -2.1%
Gross Margin: 100%
Op. Margin: 24.4%
Net Margin: 2.8%
Net Income: $85M
NI Growth: -12.2%
EPS: $8.94
1Y Return: -0.7%

My Notes

"Management noted, 'We are committed to enhancing our service offerings and customer experience, which we believe will drive growth.'"
Moat: Cogeco's regional focus and customer service reputation provide a moderate moat against larger competitors.
value - the low price-to-sales and price-to-book ratios suggest potential for undervaluation, appealing to value investors.
Higher interest rates can increase Cogeco's financing costs due to its high debt/equity ratio…
Watch on earnings: Subscriber growth rate, Average revenue per user (ARPU), Churn rate.

One Sentence Summary:

The bull case is simple: analysts see revenue climbing from $2.9B to $2.8B as potential for a strategic partnership with a major content provider to bundle services.

Auto-composed from Stock Alarm intelligence, financial statements, and analyst estimates. Not investment advice.

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