Cogent Communications Holdings, Inc.

AI-generated fair value estimate for this company.

Method: 10-year levered build-out model rather than a simple perpetuity DCF: explicit annual FCF projected from -$60M (year 1, reflecting ongoing wavelength-network and data-center-exit capex) ramping to $190M (year 10) as the capex cycle completes; cumulative FCF ($1.09B) assumed applied to pay down the current $2.45B net debt (total debt $2.636B less $183.7M cash), leaving ~$1.36B net debt at year 10; terminal value via a 7.5x EV/EBITDA exit multiple on an estimated $500M year-10 EBITDA; 10% discount rate; 47.93M shares outstanding.

Reasoning: Cogent's TTM free cash flow is currently negative (-$142.9M) due to a temporary heavy capex cycle (wavelength/IPv4 network build and the T-Mobile wireline/Lumen data-center exit), so a simple Gordon-growth perpetuity DCF on today's FCF is misleading; an explicit build-out-to-exit-multiple model with debt paydown better captures the thesis that high-margin wavelength and IPv4 leasing revenue should substantially de-lever and re-rate the business once the capex program winds down.