Valued at a market cap of $93.5 billion, Redwood City, California-based Equinix, Inc. (EQIX) is a global leader in digital infrastructure, offering various services such as colocation, interconnection, and managed IT infrastructure solutions. Its platform empowers organizations to scale rapidly, launch digital services efficiently, and enhance performance while supporting sustainability objectives.
Companies worth more than $10 billion are generally described as “large-cap” stocks, and Equinix fits this criterion perfectly. With a recurring revenue model, Equinix serves customers through fixed-rate contracts for its services, including digital ecosystems and expert consulting support.
Despite a 2.5% decline from its 52-week high of $994.03 reached on Nov. 27, shares of this data center operator have gained 11.6% over the past three months, surpassing the broader S&P 500 Index’s ($SPX) 10.3% return over the same time frame.
However, in the longer term, EQIX stock is up 19.9% on a YTD basis, lagging behind SPX’s 27.1% gain. Moreover, shares of EQIX have risen 20.4% over the past 52 weeks, underperforming SPX’s 31.7% return over the same time frame.
Yet, EQIX has been trading above its 50-day and 200-day moving averages since July, despite few fluctuations.
Equinix reported a strong Q3 2024 on Oct. 30, with AFFO per share of $9.05, surpassing the consensus estimate and showing a 10.5% year-over-year increase. Quarterly revenue totaled $2.2 billion, which was in line with expectations, and rose 6.8% from the prior year, driven by colocation and interconnection revenue growth. The company also revised its 2024 outlook, projecting total revenue of $8.7 billion - $8.8 billion and AFFO per share between $34.81 and $35.22. Additionally, Equinix announced a quarterly cash dividend of $4.26 per share. However, despite the strong results, shares of EQIX fell marginally the next day.
EQIX has lagged behind its rival, Digital Realty Trust, Inc. (DLR), which has experienced an increase of 39.8% over the past 52 weeks and a rise of 40% on a YTD basis.
Despite EQIX’s underperformance over the past year, analysts remain bullish about its prospects. The stock has a consensus rating of “Strong Buy” from the 26 analysts covering the stock, and as of writing, EQIX is trading below the mean price target of $978.29.
