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 (
(Nasdaq:) 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 growth in earnings per share, compelling growth in net income, robust revenue growth, good cash flow from operations 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 has improved earnings per share by 14.1% 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 year. We feel that this trend should continue. During the past fiscal year, EQUINIX INC increased its bottom line by earning $1.72 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($2.65 versus $1.72).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet Software & Services industry average. The net income increased by 18.6% when compared to the same quarter one year prior, going from $30.73 million to $36.45 million.
- EQIX's revenue growth trails the industry average of 36.4%. Since the same quarter one year prior, revenues rose by 18.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $194.78 million or 38.78% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.86%.
- The gross profit margin for EQUINIX INC is currently very high, coming in at 70.50%. 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 7.80% 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. The company has a P/E ratio of 96.5, above the average telecommunications industry P/E ratio of 90.7 and above the S&P 500 P/E ratio of 17.7. Equinix has a market cap of $8.7 billion and is part of the sector and industry. Shares are up 86% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.