Equinix, Inc. (EQIX), headquartered in Redwood City, California, operates as a real estate investment trust. With a market cap of $90.1 billion, the company invests in interconnected data centers. Equinix focuses on developing network and cloud-neutral data center platform for cloud and information technology, enterprises, network, and mobile services providers, as well as for financial companies. The world's digital infrastructure company is expected to announce its fiscal fourth-quarter earnings for 2024 after the market closes on Wednesday, Feb. 12.
Ahead of the event, analysts expect EQIX to report an FFO of $7.08 per share on a diluted basis, down 3% from $7.30 per share in the year-ago quarter. The company beat the consensus estimate in each of the last four quarters.
For the full year, analysts expect EQIX to report FFO of $31.09, down 3.2% from $32.11 in fiscal 2023. However, its FFO is expected to rise 9.2% year over year to $33.96 in fiscal 2025.
EQIX stock has underperformed the S&P 500’s ($SPX) 25.5% gains over the past 52 weeks, with shares up 15.3% during this period. However, it outperformed the Real Estate Select Sector SPDR Fund’s (XLRE) 5.7% gains over the same time frame.
Equinix's challenges stem from intensified competition in the data center industry, resulting in aggressive pricing strategies and potential pricing pressures. Additionally, high interest expenses pose a significant burden on the company. While the recent rate cuts by the Federal Reserve aim to alleviate financial strain, Equinix still faces obstacles due to the overall high interest rates impacting its borrowing costs and real estate development capabilities.
On Oct. 30, EQIX shares closed up marginally after reporting its Q3 results. Its FFO of $9.05 topped Wall Street forecasts of $8.70. The company’s revenue was $2.2 billion, matching Wall Street forecasts. EQIX expects full-year FFO in the range of $34.81 to $35.22, and expects revenue to be between $8.75 billion and $8.79 billion.
Analysts’ consensus opinion on EQIX stock is bullish, with a “Strong Buy” rating overall. Out of 26 analysts covering the stock, 20 advise a “Strong Buy” rating, one suggests a “Moderate Buy,” and five give a “Hold.” EQIX’s average analyst price target is $1022.46, indicating a potential upside of 10.5% from the current levels.
