Equinix Set to Release Earnings; Analysts Predict Slight Decline in Cash Flow
Forecast for Fourth Quarter Earnings
Equinix, Inc. (EQIX), based in Redwood City, California, operates as a real estate investment trust focusing on interconnected data centers. The company’s current market capitalization stands at $90.1 billion. Equinix specializes in creating a network and cloud-neutral data center platform for various sectors, including cloud computing, IT, network, mobile services, and finance. The company is anticipated to announce its fiscal fourth-quarter earnings for 2024 after market hours on Wednesday, February 12.
Expected Financial Performance
Analysts predict that EQIX will report funds from operations (FFO) of $7.08 per share on a diluted basis, representing a 3% decline from last year’s $7.30 per share in the same quarter. Remarkably, Equinix has outperformed consensus estimates in each of the previous four quarters.
Looking at the full year, a forecast of $31.09 in FFO is expected for EQIX, down 3.2% from $32.11 in fiscal 2023. However, optimistic predictions suggest a 9.2% increase in FFO to $33.96 for fiscal 2025.
Stock Performance Compared to Market
Over the past 52 weeks, EQIX stock has struggled compared to the S&P 500, which has gained 25.5%. In contrast, EQIX shares have increased by 15.3%. However, the company has outperformed the Real Estate Select Sector SPDR Fund (XLRE), which saw only a 5.7% gain during the same period.
Challenges Ahead
Equinix faces challenges from increased competition in the data center sector, leading to aggressive pricing strategies that exert pressure on profits. Additionally, high interest expenses significantly burden the company. Although recent Federal Reserve rate cuts aim to ease financial challenges, Equinix continues to grapple with high interest rates that affect its borrowing costs and real estate development strategies.
Recent Financial Results and Analyst Sentiment
On October 30, EQIX shares saw a slight uptick following the release of its Q3 results. The company reported an FFO of $9.05, surpassing Wall Street’s forecast of $8.70. Revenue totaled $2.2 billion, aligning with expectations. For the full year, Equinix anticipates FFO in the range of $34.81 to $35.22 and revenue between $8.75 billion and $8.79 billion.
Analysts maintain a bullish outlook on EQIX stock, providing an overall “Strong Buy” rating. Out of 26 analysts monitoring the stock, 20 endorse a “Strong Buy,” one recommends a “Moderate Buy,” and five suggest a “Hold.” The average price target set by analysts is $1022.46, indicating a potential upside of 10.5% from current levels.
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For further details, please view the Barchart Disclosure Policy
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
