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Equinix to Expand Further, Declares $1 Billion Plan for 2017
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It seems that the data center major, Equinix Inc. (EQIX - Free Report) , is firing on all cylinders to expand its business across different regions. Following last year’s initiatives, the company recently announced an aggressive expansion plan for 2017.
In this regard, the company has targeted approximately $1 billion non-recurring investment this year, which will include opening of new International Business Exchange (IBX) data center and expansion across some of the existing data centers.
Equinix plans to open five new IBX data centers in Sao Paulo, Frankfurt, Amsterdam, Silicon Valley and Washington D.C. — bringing the total to 155 — this year. Apart from this, the company intends to make expansion at 14 of its existing data centers.
The $1-billion targeted investment plan also includes pending acquisitions – IO UK's data center operating business in Slough, UK, and ICT-Center AG’s Zurich-based data center operating business in Switzerland. Additionally, last month’s buyout of 34.5 acres of land in Ashburn for a total consideration of $34.5 million is part of Equinix’s recently announced investment plan.
Expansions in important markets and consolidation of facilities in the existing ones have been part of Equinix’s core strategy. The company has been consistently striving to boost the revenue base as well as profitability through technological upgrades to attract more clients.
Notably, last year, the company made more than $4.5 billion investment, which includes opening of data center, expansion of colocation space and the acquisition of Telecity. The company currently operates 150 data centers across 21 countries and 41 metros globally.
Furthermore, in December last year, Equinix entered into a definitive agreement to acquire Verizon Communications’ (VZ - Free Report) 24 data center sites, comprising 29 data center buildings across 15 metro areas, for a total cash consideration of $3.6 billion. The deal is likely to close by mid-2017.
Equinix remains positive on the growing demand for data centers. To meet the increasing demand for cloud services, the global interconnection and data center company is expanding its IBX data centers globally and gaining popularity among tech companies looking for data management. Thus, the company expects its total addressable market for retail data centers to increase at a CAGR of 8% from 2013 to 2017 and reach $24.0 billion. Based on this projection, Equinix estimates revenue growth rate of 10% through 2017.
Thus, we believe that by expanding its data center assets, Equinix will be in a better position to capitalize on this opportunity. Furthermore, the expansion will help the company to fortify its global footprint and bring in additional revenues.
Shares of Equinix have been steadily trading higher on a year-to-date basis. The stock generated a return of approximately 12.6%, while the Zacks REIT-Equity Trust industry incurred a loss of 2.2% during the same time frame.
Currently, Equinix carries a Zacks Rank #3 (Hold).
Exponent and CRA International have expected long-term earnings per share growth rate of 12% and 8%, respectively.
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Equinix to Expand Further, Declares $1 Billion Plan for 2017
It seems that the data center major, Equinix Inc. (EQIX - Free Report) , is firing on all cylinders to expand its business across different regions. Following last year’s initiatives, the company recently announced an aggressive expansion plan for 2017.
In this regard, the company has targeted approximately $1 billion non-recurring investment this year, which will include opening of new International Business Exchange (IBX) data center and expansion across some of the existing data centers.
Equinix plans to open five new IBX data centers in Sao Paulo, Frankfurt, Amsterdam, Silicon Valley and Washington D.C. — bringing the total to 155 — this year. Apart from this, the company intends to make expansion at 14 of its existing data centers.
The $1-billion targeted investment plan also includes pending acquisitions – IO UK's data center operating business in Slough, UK, and ICT-Center AG’s Zurich-based data center operating business in Switzerland. Additionally, last month’s buyout of 34.5 acres of land in Ashburn for a total consideration of $34.5 million is part of Equinix’s recently announced investment plan.
Expansions in important markets and consolidation of facilities in the existing ones have been part of Equinix’s core strategy. The company has been consistently striving to boost the revenue base as well as profitability through technological upgrades to attract more clients.
Notably, last year, the company made more than $4.5 billion investment, which includes opening of data center, expansion of colocation space and the acquisition of Telecity. The company currently operates 150 data centers across 21 countries and 41 metros globally.
Furthermore, in December last year, Equinix entered into a definitive agreement to acquire Verizon Communications’ (VZ - Free Report) 24 data center sites, comprising 29 data center buildings across 15 metro areas, for a total cash consideration of $3.6 billion. The deal is likely to close by mid-2017.
Equinix remains positive on the growing demand for data centers. To meet the increasing demand for cloud services, the global interconnection and data center company is expanding its IBX data centers globally and gaining popularity among tech companies looking for data management. Thus, the company expects its total addressable market for retail data centers to increase at a CAGR of 8% from 2013 to 2017 and reach $24.0 billion. Based on this projection, Equinix estimates revenue growth rate of 10% through 2017.
Thus, we believe that by expanding its data center assets, Equinix will be in a better position to capitalize on this opportunity. Furthermore, the expansion will help the company to fortify its global footprint and bring in additional revenues.
Shares of Equinix have been steadily trading higher on a year-to-date basis. The stock generated a return of approximately 12.6%, while the Zacks REIT-Equity Trust industry incurred a loss of 2.2% during the same time frame.
Currently, Equinix carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the consulting industry are Exponent Inc. (EXPO - Free Report) and CRA International Inc. (CRAI - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Exponent and CRA International have expected long-term earnings per share growth rate of 12% and 8%, respectively.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>