Equinix (EQIX) Stock: $850 Price Target RBC Capital

By Amit Chowdhry ● Nov 28, 2021
  • The shares of Equinix Inc (NASDAQ: EQIX) have received an $850 price target from RBC Capital. These are the details.

The shares of Equinix Inc (NASDAQ: EQIX) have received an $850 price target from RBC Capital. And RBC Capital analyst Jonathan Atkin reduced the price target from $885 while keeping an “Outperform” rating on the shares.

Atkin noted that the company’s third quarter results were solid, marking a third straight quarter of record bookings and non-recurring revenue outperformance largely offsetting recurring revenues that were shy of expectations. But Atkin added that his reduced price target on Equinix reflects a more gradual ramp in EBITDA margins.

Earlier this month, Equinix reported its third quarter 2021 results. These are the highlights from the quarter:

— Quarterly revenues increased 10% over the same quarter last year to $1.675 billion, or 8% on a normalized and constant currency basis, representing the company’s 75th consecutive quarter of revenue growth

— Record channel bookings accounted for more than 35% of total bookings, nearly 50% of enterprise bookings, and more than 60% of new logos in Q3

— Interconnection revenues continued to outpace colocation revenues in Q3 with total interconnections increasing to more than 414,000

— Significant milestones in the quarter included closing the GPX India acquisition to enter the strategic market of India and expanding the xScale program with a new agreement to form a $575 million joint venture in Australia

Outlook

— For the fourth quarter of 2021, the company expects revenues to range between $1.685 and $1.705 billion, an increase of 1 – 2% compared to the prior quarter on both an as-reported and a normalized and constant currency basis. And this guidance includes a $5 million negative foreign currency impact when compared to the average FX rates in Q3 2021. Plus this guidance includes the largest ever normalized step-up in recurring revenues in Q4, a reflection of continued strong execution, and a sequential decrease of non-recurring revenues by approximately $12 million. 

— Adjusted EBITDA is expected to range between $762 and $782 million. Adjusted EBITDA includes a $2 million negative foreign currency impact when compared to the average FX rates in Q3 2021 and $7 million of integration costs from acquisitions. Recurring capital expenditures are expected to range between $75 and $85 million.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.