Cogent Communications (CCOI) is on track to deliver a "meaningful ramp" in revenue and EBITDA by 2028, UBS said in a Wednesday note.

"Cogent is on the cusp of realizing the benefits of its prior Sprint wireline acquisition from T-Mobile (closed mid-23), including the transformation of a cash burning asset acquired for $1 into a growing/profitable wavelength business with a $2B TAM," UBS said.

Also, "scaling in waves has been slower in '24 (key driver of sentiment), but we expect performance to inflect in '25+ as network reconfiguration comes to a close," the note said.

"Along with the potential monetization of data center/IPv4 assets, we believe Cogent is well positioned to lower leverage and sustain dividend growth," UBS said.

UBS initiated the company with a buy rating and $102 price target.

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