High Gross Profit Margin
Strong Operating Profit Margin
Decent Return on Equity
Strong Liquidity Ratios
🏆 Strong Business Model
🔗 Interconnection Density
🌍 Global Expansion
🚀 AI and High-Performance Compute
📈 Strong Backlog and Demand
High P/E Ratio
Elevated EV/EBITDA Ratio
Low Net Profit Margin
High Debt Levels
⚠️ Capacity Constraints
Equinix is positioned strongly in the market with a resilient business model and a focus on interconnection density. While there are challenges in capacity constraints, the company's proactive approach to future growth, particularly in AI and global expansion, suggests promising prospects ahead.
Analysis Date: February 12, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$323.98
Current Market Price: $770.03
IV/P Ratio: 0.42x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-138.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for EQIX
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (91.05)
P/B ratio ≤ 1.5 (5.49)
Current ratio ≥ 2.0 (1.63x)
Long-term debt < Net current assets (8.00x)
Margin of safety (-138.0%)
EQIX does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The operating profit margin of 15.03% reflects the company's effective cost management and ability to convert sales into operating income.
The return on equity (ROE) stands at 6.31%, indicating that the company is generating a reasonable return on shareholders' equity.
The net profit margin of 9.32% suggests that while the company is profitable, there may be room for improvement in converting revenue to net income.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
6.31%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
-0.04%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
48.94%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
9.32%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
With a current ratio of 1.63 and a quick ratio of 1.63, EQIX demonstrates good liquidity, indicating it can cover short-term liabilities effectively.
The debt-to-equity ratio of 1.24 and debt-to-assets ratio of 47.83% signal that the company has a relatively high level of debt, which could pose risks in a rising interest rate environment.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.24x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.63x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Equinix demonstrated a unique and resilient business model that successfully adapts to market demands. The company reported 22 years of consecutive quarterly revenue growth, highlighting its ability to capture and maintain market share.
Equinix's focus on interconnection and dense network services provides a competitive edge, making it a preferred choice for customers. Over 482,000 interconnections deployed indicate robust demand for connectivity.
The company is actively expanding its global footprint with 62 major projects underway across 36 metros, indicating a strong commitment to growth and meeting customer demands.
Equinix is positioning itself to capitalize on the rising demand for AI workloads and high-performance computing, with over 50% of top deals in Q4 related to such workloads.
A strong backlog with record gross bookings showcases the company's ability to capture future revenue growth, with expectations of increased recurring revenue throughout 2025.
Equinix has faced capacity constraints in key markets, which limited potential sales. The company acknowledges these challenges and is focused on expanding capacity to address demand.