Equinix, Inc. EQIX is scheduled to report fourth-quarter and full-year 2024 results on Feb. 12, after market close. The company’s quarterly results are likely to reflect year-over-year growth in revenues and adjusted funds from operations (AFFO) per share.

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In the previous quarter, this Redwood City, CA-based data center real estate investment trust (REIT) reported a surprise of 4% in terms of AFFO per share. Its quarterly results reflected steady growth in colocation and inter-connection revenues due to strong demand for digital infrastructure.

Over the preceding four quarters, EQIX’s AFFO per share surpassed the consensus estimate on all occasions, the average beat being 3.13%. This is depicted in the graph below:

Equinix, Inc. Price and EPS Surprise

Equinix, Inc. price-eps-surprise | Equinix, Inc. Quote

Factors at Play for Equinix

There is a growing reliance on technology and acceleration in digital transformation strategies by enterprises that require data exchanges. To meet this global need, Equinix is expanding its International Business Exchanges data centers globally and is gaining traction among tech companies looking for data management.

Equinix is expected to have continued with its asset-based expansion during the quarter through acquisitions and development activities. Its robust balance sheet position is likely to have enabled it to capitalize on long-term growth opportunities.

The company’s recurring revenue model, which comprises colocation, related interconnection and managed IT infrastructure services, is expected to have supported stable cash flows in the to-be-reported quarter, boosting the data center REIT’s top line. Also, solid demand for Equinix’s interconnected ecosystem in the to-be-reported quarter is likely to have given it an edge.

Q4 Projections for EQIX

The Zacks Consensus Estimate for colocation revenues is pegged at $1.57 billion, suggesting growth of 6.6% from $1.47 billion in the prior-year period. The consensus mark for interconnection revenues is pegged at $392.8 million, indicating growth of 9.8% from $357.7 million in the prior-year period.

For the fourth quarter of 2024, Equinix projected revenues between $2.262 billion and $2.302 billion. The Zacks Consensus Estimate stands at $2.28 billion, indicating an increase of 8.1% from the year-ago period’s reported figure.

EQIX estimated adjusted EBITDA in the range of $1.01-$1.05 billion for the fourth quarter. Our estimate is pegged at $1.05 billion, implying a year-over-year increase of 14%.

However, high interest expenses might have partly impeded the company’s quarterly performance. For the fourth quarter of 2024, our estimate for interest expenses implies a year-over-year increase of 8.1%.

EQIX’s activities during the to-be-reported were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has remained unchanged at $8.11 over the past two months. However, it suggests an 11.1% increase from the prior-year quarter’s reported figure.

EQIX’s 2024 Projections

For 2024, Equinix projected AFFO per share between $34.81 and $35.22, suggesting an 8-10% increase from the previous year. Equinix estimated generating total revenues in the band of $8.748-$8.788 billion, indicating year-over-year growth of 7%. The company projected an adjusted EBITDA in the range of $4.086-$4.126 billion. Expectations for the adjusted EBITDA margin were maintained at 47%.

For the full year, the Zacks Consensus Estimate for AFFO per share is pegged at $35.19. The figure indicates a 9.6% increase year over year on 7% year-over-year growth in revenues to $8.76 billion.

What Our Quantitative Model Predicts for EQIX

Our proven model does not conclusively predict a surprise in terms of AFFO per share for Equinix this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is not the case here.

Equinix currently has an Earnings ESP of 0.00% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks That Warrant a Look

Here are two other stocks from the broader REIT sector — Highwoods Properties HIW and Park Hotels & Resorts PK — that you may want to consider, as our model shows that these, too, have the right combination of elements to report a surprise this quarter.

Highwoods Properties, scheduled to report quarterly numbers on Feb. 11, has an Earnings ESP of +0.22% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Park Hotels is slated to report quarterly numbers on Feb. 19. PK has an Earnings ESP of +10.69% and carries a Zacks Rank of 3 presently.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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Equinix, Inc. (EQIX) : Free Stock Analysis Report

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