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Equinix (EQIX)
NASDAQ:EQIX
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Equinix
(NASDAQ:EQIX)70Outperform
Positive Factors
AI Demand
AI-related deal momentum is increasing, with 50%+ of the volume of top 25 deals being AI-related.
EBITDA Margin
The company guidance suggests 190bps of EBITDA margin improvement, which should result in higher bottom-line flow-through.
Negative Factors
Revenue Guidance
2025 revenue guidance of $9,083mm was below consensus, with headwinds from FX, power prices, and EQIX Metal exit.
Equinix (EQIX) vs. S&P 500 (SPY)
Market Cap
$84.86B
Dividend Yield2%
Average Volume (3M)579.15K
Price to Earnings (P/E)102.5
Beta (1Y)1.09
Revenue Growth6.84%
EPS Growth-17.14%
CountryUS
Employees13,606
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)8.55
Shares Outstanding97,332,010
10 Day Avg. Volume750,570
30 Day Avg. Volume579,149
Financial Highlights & Ratios
PEG Ratio4.35
Price to Book (P/B)N/A
Price to Sales (P/S)9.70
Price to Cash Flow (P/CF)21.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1,041.24Price Target Upside21.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
Equinix Business Overview & Revenue Model
Company DescriptionEquinix, Inc. (EQIX) is a global digital infrastructure company that operates a network of interconnected data centers across the world. Founded in 1998 and headquartered in Redwood City, California, Equinix provides colocation, interconnection, and managed IT services to enterprises, network service providers, cloud providers, and financial companies. As a leader in the data center industry, Equinix helps businesses securely connect their digital ecosystems and enable digital transformation through its Platform Equinix, which spans over 240 data centers in 27 countries.
How the Company Makes MoneyEquinix generates revenue primarily through the leasing of data center space and related services to its customers. The company's core revenue streams include colocation services, where customers rent space for their servers and networking equipment within Equinix facilities; interconnection services, which enable customers to directly connect with one another through cross connects and Equinix Cloud Exchange Fabric; and managed services, which provide additional support and infrastructure management. Equinix's business model benefits from economies of scale, as the company's global presence and extensive network of data centers allow it to effectively serve multinational enterprises and cloud providers. Strategic partnerships with leading technology companies and continuous investment in expanding its data center footprint further bolster Equinix's revenue growth and market position.
Equinix Financial Statement Overview
Summary
Equinix demonstrates strong financial health with significant revenue and cash flow growth, although it faces slight operational challenges with a decreased EBIT margin. The company balances its high leverage typical of REITs with effective equity and cash flow management.Income Statement
Equinix has demonstrated strong revenue growth over the years, with 2024 revenue increasing by approximately 6.83% compared to 2023. The company maintains healthy margins with a Gross Profit Margin of 48.93% and a Net Profit Margin of 9.32% in 2024. However, the EBIT Margin decreased slightly from 17.63% in 2023 to 15.18% in 2024, reflecting some operational challenges.85
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio is 1.27, indicating moderately high leverage, which is typical for REITs but still poses some risk. The Return on Equity (ROE) is strong at 6.02% for 2024, demonstrating effective use of equity. The Equity Ratio is 38.57%, suggesting a solid equity base but a considerable portion of the assets is financed through debt.78
Positive
Cash Flow
Equinix shows robust cash flow performance with a significant Free Cash Flow growth rate of 645.74% from 2023 to 2024. The Operating Cash Flow to Net Income Ratio is 3.99, indicating strong cash generation relative to net income. The Free Cash Flow to Net Income Ratio is 3.99, highlighting efficient conversion of income to cash.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.75B | 8.19B | 7.26B | 6.64B | 6.00B | Gross Profit |
| 4.28B | 3.96B | 3.51B | 3.16B | 2.92B | EBIT |
| 1.33B | 1.44B | 1.20B | 1.11B | 1.05B | EBITDA |
| 3.44B | 3.37B | 2.92B | 2.60B | 2.35B | Net Income Common Stockholders |
| 815.00M | 969.18M | 704.35M | 500.19M | 369.78M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.61B | 2.10B | 1.91B | 1.54B | 1.61B | Total Assets |
| 35.09B | 32.65B | 30.31B | 27.92B | 27.04B | Total Debt |
| 17.12B | 17.46B | 16.47B | 14.99B | 13.92B | Net Debt |
| 14.04B | 15.36B | 14.56B | 13.46B | 12.32B | Total Liabilities |
| 21.53B | 20.14B | 18.80B | 17.04B | 16.40B | Stockholders Equity |
| 13.53B | 12.49B | 11.51B | 10.88B | 10.63B |
| Cash Flow | Free Cash Flow | |||
| 183.00M | 435.58M | 685.18M | -204.31M | 27.32M | Operating Cash Flow |
| 3.25B | 3.22B | 2.96B | 2.55B | 2.31B | Investing Cash Flow |
| -3.94B | -3.22B | -3.36B | -3.01B | -3.43B | Financing Cash Flow |
| 1.72B | 211.45M | 856.77M | 413.76M | 815.53M |
Equinix Technical Analysis
Negative
859.52
Price Trends
919.78
Negative
918.71
Negative
858.10
Positive
Market Momentum
-9.96
Positive
31.14
Neutral
27.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EQIX, the sentiment is Negative. The current price of 859.52 is below the 20-day moving average (MA) of 914.95, below the 50-day MA of 919.78, and above the 200-day MA of 858.10, indicating a neutral trend. The MACD of -9.96 indicates Positive momentum. The RSI at 31.14 is Neutral, neither overbought nor oversold. The STOCH value of 27.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EQIX.
Equinix Risk Analysis
Equinix disclosed 51 risk factors in its most recent earnings report. Equinix reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Equinix Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $49.96B | 92.03 | 2.98% | 3.29% | 1.42% | -42.07% | |
73 Outperform | $49.21B | 36.11 | 245.32% | 0.83% | 11.64% | -23.54% | |
70 Outperform | $84.86B | 102.52 | 6.27% | 2.00% | 6.84% | -17.14% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
61 Neutral | $7.88B | ― | -18.30% | ― | 9.61% | -185.28% | |
56 Neutral | $25.94B | 145.20 | -35.81% | 3.30% | 12.22% | -2.68% |
* Real Estate Sector Average
Performance Comparison
EQIX
Equinix
859.52
-15.97
-1.82%
COR
Cencora
254.58
19.02
8.07%
DLR
Digital Realty
149.17
8.09
5.73%
IRM
Iron Mountain
84.38
5.93
7.56%
GDS
GDS Holdings
36.36
28.54
364.96%
Equinix Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -7.61% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call demonstrated strong performance with record-breaking revenue and growth in key areas such as adjusted EBITDA and AFFO. Despite significant achievements, challenges such as currency impacts, capacity constraints, and impairment charges were noted. The company is optimistic about future growth opportunities, particularly in AI and interconnection services.Highlights
Record-Breaking Revenue and Growth
Revenues for the full year were $8.7 billion, up 8% year-over-year, marking 22 years of consecutive quarterly revenue growth.
Improved Adjusted EBITDA Margins
Adjusted EBITDA was $4.1 billion, with a 160 basis point improvement in margins year-over-year.
Strong AFFO Growth
AFFO per share grew 10% year-over-year, reaching the top end of long-term expectations.
Record Gross Bookings
Equinix delivered the best gross bookings performance in its 26-year history, with more than 16,200 deals across over 6,000 customers in 2024.
xScale Business Expansion
Leased approximately 150 megawatts of capacity and nearly tripled the investment capital of the xScale program in 2024.
Sustainability Achievements
Recognized on CDP's Climate Change A List for the third consecutive year and rated AAA by MSCI for the first time.
Lowlights
Currency Impact on Revenue
As-reported numbers and outlook were tempered by a significantly stronger U.S. dollar during Q4, including a $22 million FX headwind.
End-of-Sale of Equinix Metal
Decision to end-of-sale Equinix Metal to concentrate on core interconnection solutions, resulting in a $160 million impairment charge.
Capacity Constraints in Key Markets
Bookings could have been stronger if there had been available capacity in Tier 1 metros.
Impairment and Restructuring Charges
Recorded a $73 million impairment charge for the Hong Kong 4 asset and a $31 million restructuring charge related to a reduction in force.
Company Guidance
During the Equinix Fourth Quarter Earnings Conference Call, the company reported strong financial performance for the year 2024, with revenues reaching $8.7 billion, marking an 8% year-over-year increase. The adjusted EBITDA was $4.1 billion, reflecting a 160 basis point improvement in margins. Equinix's AFFO per share grew by 10% year-over-year, at the top end of their long-term expectations. The company closed a record number of over 16,200 deals across more than 6,000 customers, with bookings driven by 30% through their channel program. In 2024, Equinix leased approximately 150 megawatts of capacity in their xScale business and achieved five-nines uptime, reducing their Power Usage Effectiveness (PUE) by over 6%, saving $18 million in operating costs. For 2025, Equinix forecasts a 7% to 8% revenue growth on a normalized and constant currency basis, with adjusted EBITDA margins expected to improve by 190 basis points, aiming for AFFO per share growth of 7% to 9%. The company plans to invest between $3.2 billion and $3.5 billion in capital expenditures, focusing on bold expansions and enhancements in data center capacity across major metros.Equinix Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Equinix Approves 2025 Annual Incentive Plan
Neutral
Feb 11, 2025
On February 6, 2025, Equinix’s Board of Directors approved the 2025 Annual Incentive Plan for eligible employees, including executive officers. The plan aims to align executive incentives with shareholder interests by offering bonuses in the form of vested restricted stock units. This approach allows Equinix to retain cash for investments. The plan’s performance metrics are based on revenue and adjusted funds from operations per share goals, with a strategic modifier for senior leaders that aligns compensation with growth and environmental priorities. The plan includes adjustments for certain external factors and caps performance bonuses at 132% of the target.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.