What Should We Expect From Equinix Inc (REIT)’s (NASDAQ:EQIX) Earnings In The Years Ahead?
In December 2017, Equinix Inc (REIT) (NASDAQ:EQIX) released its most recent earnings announcement, which indicated that the company gained from a significant tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts perceive Equinix (REIT)’s earnings growth outlook 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. See our latest analysis for Equinix (REIT)
Market analysts’ prospects for the coming year seems positive, with earnings rising by a significant 83.85%. This strong growth in earnings is expected to continue, bringing the bottom line up to US$722.49M by 2021.
Although it’s helpful to understand the growth each year relative to today’s value, it may be more valuable to evaluate the rate at which the earnings are growing on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Equinix (REIT)’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 25.38%. This means that, we can assume Equinix (REIT) will grow its earnings by 25.38% every year for the next couple of years.
Next Steps:
For Equinix (REIT), I’ve compiled three pertinent factors you should further research:
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.
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.
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!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
