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Cogeco Communications
(TSX:CCA)
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Rating:59Neutral
Price Target:
C$54.00
▼(-11.59% Downside)
Action:Downgraded
Date:07/17/26
The score is primarily driven by pressured financial performance (TTM net loss, slowing revenue, and elevated leverage) offset by resilient cash generation. Valuation is a major positive (low P/E and high dividend yield), but weak technical trend and mixed earnings-call takeaways—especially U.S. impairment and ongoing U.S. headwinds—cap the overall rating.
Positive Factors
Recurring subscription model and owned networks
Recurring broadband, video, and voice subscriptions provide a durable revenue base, while owned last-mile networks support service reliability and customer relationships. Bundling can increase customer value and reduce churn, helping preserve cash generation across the next several quarters.
Negative Factors
Revenue slowdown and TTM net loss
The combination of declining revenue and a TTM net loss weakens earnings quality and reduces confidence in near-term profitability. Although operating margins remain comparatively solid, sustained top-line pressure can limit investment flexibility and make earnings more sensitive to execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring subscription model and owned networks
Recurring broadband, video, and voice subscriptions provide a durable revenue base, while owned last-mile networks support service reliability and customer relationships. Bundling can increase customer value and reduce churn, helping preserve cash generation across the next several quarters.
Read all positive factors
Cogeco Communications (CCA) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.18B
Dividend Yield7.62%
Average Volume (3M)138.66K
Price to Earnings (P/E)―
Beta (1Y)0.54
Revenue Growth-4.86%
EPS Growth-440.35%
CountryCA
Employees3,926
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)-26.43
Shares Outstanding30,296,728
10 Day Avg. Volume208,759
30 Day Avg. Volume138,661
Financial Highlights & Ratios
PEG Ratio-3.14
Price to Book (P/B)0.86
Price to Sales (P/S)0.93
P/FCF Ratio4.99
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$72.40Price Target Upside18.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)8.6
Revenue Forecast (FY)C$2.73B
Cogeco Communications Business Overview & Revenue Model
Company Description
Cogeco Communications Inc. is a North American telecommunications company that operates through two principal segments: Canadian Broadband Services and American Broadband Services. Utilizing advanced two-way fiber networks, it provides internet, v...
How the Company Makes Money
Cogeco Communications makes money mainly through recurring subscription revenue from its telecom operations and, to a lesser extent, advertising and related revenue from radio broadcasting.
1) Subscription-based connectivity (primary revenue driv...
Cogeco Communications Earnings Call Summary
Earnings Call Date:Jul 15, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Negative
The call presented a mixed picture: strong free cash flow generation, resilient Canadian performance, and promising early traction for digital/wireless initiatives (OXIO, Welo) are meaningful positives. However, a very large non-cash impairment tied to the U.S. assets, ongoing U.S. ARPU pressure, expected Q4 subscriber weakness in the U.S., and a slower-than-expected U.S. deleveraging path are substantial negatives. While management is pursuing operational levers (AI, scaling Welo, procurement and CapEx efficiencies, debt repurchases), the scale of the U.S. challenges and the impairment weigh heavily on the near-term outlook.Positive Updates
Strong Free Cash Flow Generation
Generated CAD 169 million in free cash flow in Q3 and a cumulative CAD 450 million after three quarters, driven by transformation initiatives and disciplined capital allocation.
Negative Updates
Large Non-Cash U.S. Impairment
Recorded a significant non-cash impairment related to U.S. assets: CAD 1.8 billion (stated as CAD 1.8B / US$1.3B) and noted on a pretax basis an amount of CAD 2.2 billion (US$1.6B), which mainly impacted goodwill — highlighting material downward revisions to U.S. asset valuations.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Free Cash Flow Generation
Generated CAD 169 million in free cash flow in Q3 and a cumulative CAD 450 million after three quarters, driven by transformation initiatives and disciplined capital allocation.
Read all positive updates
Company Guidance
Management reiterated its fiscal 2026 guidelines (updated in April) and gave a number of specific metrics: Q3 free cash flow was CAD 169 million (CAD 450 million cumulative after three quarters); they now assume FY2026 current income tax expense of CAD 25 million (versus ~CAD 40 million previously), reflecting an ~8.5% effective rate; consolidated leverage was 3.2x at quarter‑end and the company repurchased US$21 million of Term Loan B (with ongoing TLB repurchases planned); they recorded a U.S. non‑cash impairment of CAD 1.8 billion (US$1.3 billion) — cited as CAD 2.2 billion (US$1.6 billion) on a pretax basis — and Cogeco Inc. took a pre‑tax CAD 26 million intangible impairment; for the balance of the year Canada is expected to deliver slightly positive year‑over‑year revenue and adjusted EBITDA (Q3 benefited from some non‑recurring cost items), while U.S. Q4 revenue and adjusted EBITDA (in USD) are expected to be down year‑over‑year but at a smaller percentage decline than the first three quarters; consolidated CapEx is expected to increase in Q4 versus Q3, with historical CapEx intensity around 18–19%, a medium‑term aim below 20% and a 17–19% placeholder cited for FY27+, and guidance is provided in constant currency (free cash flow is less FX‑sensitive due to U.S.‑denominated debt and CapEx acting as a natural hedge).Cogeco Communications Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
57
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.81B | 2.91B | 2.98B | 2.98B | 2.90B | 2.51B |
| Gross Profit | 1.34B | 867.97M | 2.49B | 1.31B | 1.23B | 1.12B |
| EBITDA | -831.84M | 1.42B | 1.36B | 1.39B | 1.36B | 1.20B |
| Net Income | -1.11B | 322.58M | 335.53M | 392.27M | 423.30M | 401.52M |
Balance Sheet | ||||||
| Total Assets | 7.49B | 9.69B | 9.68B | 9.77B | 9.28B | 7.35B |
| Cash, Cash Equivalents and Short-Term Investments | 77.31M | 75.15M | 76.33M | 362.92M | 370.90M | 549.05M |
| Total Debt | 4.47B | 4.56B | 4.82B | 5.04B | 4.68B | 3.28B |
| Total Liabilities | 5.49B | 6.01B | 6.20B | 6.33B | 6.09B | 4.55B |
| Stockholders Equity | 1.85B | 3.16B | 2.98B | 2.96B | 2.75B | 2.42B |
Cash Flow | ||||||
| Free Cash Flow | 372.52M | 541.84M | 516.13M | 100.08M | 259.55M | 426.86M |
| Operating Cash Flow | 931.96M | 1.14B | 1.18B | 962.90M | 1.24B | 1.02B |
| Investing Cash Flow | -574.94M | -583.37M | -916.61M | -954.47M | -2.41B | -801.30M |
| Financing Cash Flow | -523.71M | -552.55M | -542.37M | -23.77M | 981.92M | -27.41M |
Cogeco Communications Technical Analysis
Negative
61.08
Price Trends
58.39
Negative
60.78
Negative
63.29
Negative
Market Momentum
-2.13
Positive
26.13
Positive
14.80
Positive
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 61.08 is above the 20-day moving average (MA) of 55.38, above the 50-day MA of 58.39, and below the 200-day MA of 63.29, indicating a bearish trend. The MACD of -2.13 indicates Positive momentum. The RSI at 26.13 is Positive, neither overbought nor oversold. The STOCH value of 14.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CCA.
Cogeco Communications Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$13.81B | 15.54 | 35.86% | 2.50% | 3.12% | 24.49% | |
65 Neutral | C$23.47B | 3.76 | 32.78% | 4.61% | 8.73% | 302.65% | |
64 Neutral | C$26.25B | 4.15 | 27.73% | 6.24% | 1.59% | 1374.54% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
59 Neutral | C$2.18B | -1.96 | -38.76% | 7.62% | -4.86% | -440.35% | |
53 Neutral | C$61.09M | -3.01 | -2436.24% | ― | -3.46% | 27.60% | |
50 Neutral | C$17.88B | -19.53 | -6.56% | 12.89% | -1.06% | -188.85% |
* Communication Services Sector Average
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Cogeco Communications Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Cogeco Communications Reopens 2033 Senior Secured Notes With $200 Million Issue
Positive
Aug 6, 2026
Cogeco Communications has reopened its 5.299% senior secured notes due February 16, 2033, issuing an additional $200 million that will be fully fungible with the existing $300 million notes from 2023. The new tranche, priced at 103.966% of face va...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.