Redwood City, California-based Equinix, Inc. (EQIX) is a global digital infrastructure company and a real estate investment trust (REIT) that specializes in internet connectivity and colocation centers. Valued at a market cap of $84.8 billion, the company's services are utilized by a diverse range of industries, including finance, manufacturing, retail, transportation, government, healthcare, and education, to interconnect and manage their digital operations effectively.
This specialty REIT has outpaced the broader market over the past 52 weeks. Shares of EQIX have soared 10.9% over this time frame, while the broader S&P 500 Index ($SPX) has gained 10.1%. However, on a YTD basis, the stock is down 8.1%, lagging behind SPX’s marginal drop.
Narrowing the focus, EQIX has underperformed the Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF’s (SRVR) 12.7% uptick over the past 52 weeks and 3.7% rise on a YTD basis.
On Apr. 30, EQIX reported better-than-expected Q1 results, and its share price closed up marginally in the following trading session. Its revenue improved 4.6% year-over-year to $2.2 billion, thanks to strong demand for its digital infrastructure and services. The top line figure also came in slightly above the consensus estimates. Moreover, its AFFO of $9.67 per share grew 9.1% from the year-ago quarter and exceeded Wall Street’s estimates by a notable 7.9%. Adding to the positives, its recurring revenues advanced 3.8% year-over-year to $2.1 billion, while its adjusted EBITDA reached $1.1 billion, up 7.6% from the previous-year quarter.
Looking ahead, EQIX raised its fiscal 2025 AFFO per share guidance and now expects it to be between $37.36 and $38.17.
For the current fiscal year, ending in December, analysts expect Equinix’s FFO to decline 4.7% year over year to $33.36 per share. The company’s FFO surprise history is promising. It topped the consensus estimates in each of the last four quarters.
Among the 29 analysts covering the stock, the consensus rating is a “Strong Buy” which is based on 26 “Strong Buy,” one “Moderate Buy,” and two “Hold” ratings.
This configuration is more bullish than a month ago, with 24 analysts suggesting a “Strong Buy” rating.
On May 19, BofA reinstated a “Buy” rating on Equinix with a price target of $1,000, which indicates a 15.4% potential upside from the current levels.
The mean price target of $1,013.63 represents a 17% premium from EQIX’s current price levels, while the Street-high price target of $1,218 suggests an ambitious upside potential of 40.6%.
