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What Are Analysts Saying About Equinix, Inc. (REIT)'s (NASDAQ:EQIX) Growth?

Simply Wall St

Equinix, Inc. (REIT)'s (NASDAQ:EQIX) latest earnings announcement in December 2018 revealed that the business benefited from a strong tailwind, leading to a high double-digit earnings growth of 57%. Below, I've laid out key numbers on how market analysts perceive Equinix (REIT)'s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Equinix (REIT)

Market analysts' consensus outlook for this coming year seems positive, with earnings increasing by a robust 45%. This growth seems to continue into the following year with rates arriving at double digit 79% compared to today’s earnings, and finally hitting US$805m by 2022.

NasdaqGS:EQIX Past and Future Earnings, April 15th 2019

Even though it is informative understanding the growth year by year relative to today’s level, it may be more insightful gauging the rate at which the business is growing on average every year. The advantage of this technique is that we can get a bigger picture of the direction of Equinix (REIT)'s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 19%. This means, we can anticipate Equinix (REIT) will grow its earnings by 19% every year for the next couple of years.

Next Steps:

For Equinix (REIT), I've put together three key aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is EQIX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether EQIX is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EQIX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.