As the cloud continues to grow, companies are finding ways of using off site locations to secure and store their information.
Not only does it clear valuable space, but it is also a more secure place to store it. One company that has been growing at a steady pace in this market is Equinix.
Founded in 1998 and headquartered in Redwood City, California, Equinix, Inc. is a publicly owned REIT. It 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 provides colocation services and offerings, including operations space, storage space, cabinets, and power for customers colocation needs; interconnection services comprising physical cross connect/direct interconnections, Equinix Internet Exchange, Equinix Cloud Exchange, and managed IT infrastructure services, including installation of customer equipment and cabling, as well as equipment rebooting and power cycling, card swapping, and emergency equipment replacement services.
They have created a one stop shop for companies looking to secure and expand their wireless and cloud systems.
The theme of mergers and acquisitions has continued with EQIX as they have recently acquired Nimbo, Bit-isle, and most recently Telecity. All of these have allowed EQIX to expand into broader markets and have given the view that they will continue to expand over the next several years.
Equinix is positive on the growing demand for data centers driven by the Big Data exchanges. To meet this demand, the global interconnection and data center company is expanding the IBX data centers across the world and gaining popularity among tech companies looking for data management.
Explosive growth in mobile, content delivery, video streaming, tele-presence, social media, and cloud-based data traffic offers tremendous revenue opportunities for high-margin corporate and retail services such as Ethernet and MPLS.
The “Internet of Things” has also brought the internet and the cloud to the masses with the implementation of WIFI now installed even in cars along with cities becoming wireless such as NYC. Now more than ever people are connected to one another either using their phones, tablets, laptops or even cars.
Because of this, security becomes an even greater priority with payments becoming wireless on all of these platforms. All of these factors leave us to believe that Equinix has much room to grow in the near future as demand continues to grow.
Their business model looks very good right now, so now let’s look at the stocks numbers.
Equinix Inc. has a market cap of 20.6 billion, making it a Mid-Cap , Technology stock ideal for an investor who has a moderate risk profile.
The stock currently has a forward PE ratio of 18.46, based on 2016 earnings estimates of $16.25 per share. I currently have a five-year target price of $513.46 on Equinix. This still represents significant upside potential from its current level. It currently has a proprietary Value Grade of B.
The performance of Equinix Inc. stock has significantly beaten the S&P 500 Index over the last one, three, five, and ten years. Overall Equinix Inc. gets a proprietary performance grade of B+ and a momentum grade of C+ low given the current volatility in the market.
Out of the 4,100+ stocks in the Best Stocks Now universe, Equinix Inc. is currently ranked #34 in my Best Stocks Now Database. We are long Equinix Inc. for our Moderate accounts here at Gunderson Capital Management.