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Equinix Inc. Stock Buy Recommendation Reiterated (EQIX)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Equinix (Nasdaq:EQIX) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:

  • EQUINIX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EQUINIX INC increased its bottom line by earning $2.65 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($3.72 versus $2.65).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 151.9% when compared to the same quarter one year prior, rising from $17.81 million to $44.86 million.
  • EQIX's revenue growth trails the industry average of 33.4%. Since the same quarter one year prior, revenues rose by 20.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for EQUINIX INC is currently very high, coming in at 71.00%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, EQIX's net profit margin of 8.85% significantly trails the industry average.

Equinix, Inc. provides data center services to protect and connect the information assets for the enterprises, financial services companies, and content and network providers primarily in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. Equinix has a market cap of $10.39 billion and is part of the technology sector and internet industry. The company has a P/E ratio of 79.8, above the S&P 500 P/E ratio of 17.7. Shares are up 3.3% year to date as of the close of trading on Wednesday.

You can view the full Equinix Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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