Is Cogent Communications Holdings, Inc. overvalued or undervalued?

As of 27 February 2025, the valuation grade for Cogent Communications Holdings, Inc. has moved from very attractive to risky. The company is currently overvalued, particularly highlighted by its P/E ratio being not applicable due to losses, a Price to Book Value of 16.52, and an EV to EBITDA ratio of 27.56. The negative ROCE of -11.42% and ROE of -127.25% further emphasize the financial struggles the company is facing.
In comparison to its peers, Cogent's valuation appears concerning, especially when looking at a peer with a P/E ratio of -12.80 and an EV to EBITDA of 27.31. The high Price to Book Value indicates that investors are paying a premium for the stock despite its poor performance metrics. Additionally, while the company has a notable dividend yield of 8.28%, the overall returns have lagged behind the S&P 500, with a year-to-date decline of 36.06% compared to a modest gain of 2.44% for the index.