We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Equinix (EQIX) Down 8.3% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Equinix (EQIX - Free Report) . Shares have lost about 8.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Equinix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Equinix posted strong results for third-quarter 2020, wherein adjusted AFFO per share and revenues surpassed the Zacks Consensus Estimate and improved year over year.
The company’s quarterly AFFO per share was $6.48, beating the Zacks Consensus Estimate of $6.03. The figure also improved 17.4% from the year-ago quarter’s $5.52.
The upside primarily stemmed from steady growth in interconnection revenues. In fact, during the third quarter, it added an incremental 8,500 interconnections, which were driven by video conferencing, work-from-home aggregation and enterprise cloud connectivity.
Quarter in Detail
Total quarterly revenues were $1.52 billion, surpassing the Zacks Consensus Estimate of $1.50 billion. Also, the top-line figure improved 8.8% year over year, representing the 71st consecutive quarter of revenue growth.
Recurring revenues were $1.43 billion, up 8.5% from the year-ago quarter’s figure. Non-recurring revenues improved 13.2% from the year-ago quarter to $87.7 million.
Revenues from the three geographic regions increased on a year-over-year basis as well. Revenues from the Americas, EMEA and the Asia Pacific jumped 4.2%, 13.1% and 12.3% to $672.3 million, $518 million and $329.3 million, respectively.
Cash gross margin was 67%, stable year over year. Total operating expenses were up 13.8% year over year to $463.4 million.
Adjusted EBITDA was $737 million, up 9.3% year over year. Adjusted EBITDA margin was 49%, up from 48% as of the prior year quarter. AFFO appreciated 22.6% year over year to $579.7 million in the September-end quarter.
Balance Sheet
Equinix exited the third quarter with cash and cash equivalents of $2.6 billion. The company’s total debt principal outstanding was $12.4 billion as of Sep 30, 2020.
Guidance
The company improved its guidance for the ongoing year on foreign currency benefit and the acquisition of the Bell Canada data centers. For 2020, it estimates generating revenues of $5.983-$6.003 billion as compared with $5.919-$5.989 billion mentioned earlier. It predicts adjusted EBITDA of $2.827-$2.847 billion, higher than $2.781-$2.851 billion stated earlier.
Moreover, AFFO is expected to be $2.157-$2.177 billion as compared with $2.107-$2.177 billion mentioned previously. Further, AFFO per share is estimated to be $24.38-$24.61, up from $23.87-$24.67 stated earlier.
For fourth-quarter 2020, Equinix projects revenues of $1.549-$1.569 billion. Adjusted EBITDA is likely to be between $685 million and $705 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Equinix has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Equinix has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Equinix (EQIX) Down 8.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Equinix (EQIX - Free Report) . Shares have lost about 8.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Equinix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Equinix Tops Q3 FFO & Revenues Estimates, Ups '20 View
Equinix posted strong results for third-quarter 2020, wherein adjusted AFFO per share and revenues surpassed the Zacks Consensus Estimate and improved year over year.
The company’s quarterly AFFO per share was $6.48, beating the Zacks Consensus Estimate of $6.03. The figure also improved 17.4% from the year-ago quarter’s $5.52.
The upside primarily stemmed from steady growth in interconnection revenues. In fact, during the third quarter, it added an incremental 8,500 interconnections, which were driven by video conferencing, work-from-home aggregation and enterprise cloud connectivity.
Quarter in Detail
Total quarterly revenues were $1.52 billion, surpassing the Zacks Consensus Estimate of $1.50 billion. Also, the top-line figure improved 8.8% year over year, representing the 71st consecutive quarter of revenue growth.
Recurring revenues were $1.43 billion, up 8.5% from the year-ago quarter’s figure. Non-recurring revenues improved 13.2% from the year-ago quarter to $87.7 million.
Revenues from the three geographic regions increased on a year-over-year basis as well. Revenues from the Americas, EMEA and the Asia Pacific jumped 4.2%, 13.1% and 12.3% to $672.3 million, $518 million and $329.3 million, respectively.
Cash gross margin was 67%, stable year over year. Total operating expenses were up 13.8% year over year to $463.4 million.
Adjusted EBITDA was $737 million, up 9.3% year over year. Adjusted EBITDA margin was 49%, up from 48% as of the prior year quarter. AFFO appreciated 22.6% year over year to $579.7 million in the September-end quarter.
Balance Sheet
Equinix exited the third quarter with cash and cash equivalents of $2.6 billion. The company’s total debt principal outstanding was $12.4 billion as of Sep 30, 2020.
Guidance
The company improved its guidance for the ongoing year on foreign currency benefit and the acquisition of the Bell Canada data centers. For 2020, it estimates generating revenues of $5.983-$6.003 billion as compared with $5.919-$5.989 billion mentioned earlier. It predicts adjusted EBITDA of $2.827-$2.847 billion, higher than $2.781-$2.851 billion stated earlier.
Moreover, AFFO is expected to be $2.157-$2.177 billion as compared with $2.107-$2.177 billion mentioned previously. Further, AFFO per share is estimated to be $24.38-$24.61, up from $23.87-$24.67 stated earlier.
For fourth-quarter 2020, Equinix projects revenues of $1.549-$1.569 billion. Adjusted EBITDA is likely to be between $685 million and $705 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Equinix has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Equinix has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.