Join        Login             Stock Quote

Equinix (EQIX) PT Lifted To $182 By RBC Capital On Higher Out-Year Cash Flow Forecast, 'Outperform' Maintained

 May 01, 2012 12:30 PM

(By Balaseshan) RBC Capital Markets analyst Jonathan Atkin increased his price target on shares of Equinix Inc. (NASDAQ:EQIX) to $182 from $141 on higher out-year cash flow projections driven by top-line growth and margin expansion, while maintaining "Outperform" rating.

EQIX reported better-than-expected revenues and adjusted EBITDA. Revenues were $452.2 million (Atkin's estimate at $446 million) with recurring revenues of $429.6 million; Foreign exchange headwinds were $500,000.

Adjusted EBITDA of $215.2 million beat the analyst's estimate of $205.4 million partly due to one-off gross margin benefits in the quarter; normalized adjusted EBITDA would have been $211.5 million, up 26.4% year-over-year. Capex was $145 million (his estimate of $200 million) with ongoing/expansion capex of $43.1 million/$102.4 million.

[Related -Homebuilders Surprise To The Downside]

MRR churn was 2.4%, up 40 basis points sequential, partly due to a UK customer downsizing its footprint. EQIX receive a $2.8 million termination fee and has already been able to resell portion of the reclaimed space at a higher rate. Americas added 1,000 billable cabinets while EMEA/APAC added 500/200.

Average revenues per billable cabinet in the quarter were $2,169, $1,229 and $1,928 for Americas, EMEA and APAC, respectively. The utilization rate remained flat at 83% for Americas and ticked up 100 basis points for EMEA/APAC to 79%/65%. The 59% of EQIX's MRR comes from customers who are deployed in multiple geographical regions.

[Related -Quickel's Techs: AAPL, MSFT, EQIX]

Management provided no material update and plans to reach a decision by year-end. Equinix' NOLs of $450 million should shield the company from meaningful taxes through 2014. The analyst believes a REIT conversion prior to that time is more likely than not.

Atkin's estimated 2012 consolidated revenues are $1.9 billion (previous: $1.89 billion) with recurring and  non-recurring contributions of $1.81 billion and $90.3 million, respectively. He estimates colocation revenues will account for 75.5% of 2012 consolidated revenues and interconnect/managed infrastructure will account for 14.9%/4.7%.

The brokerage raised its 2012 EBITDA estimate to $882 million from $868.2 million and its 2013 estimate to $1.062 billion from $1.025 billion. The firm also lifted its 2012 capex estimate to $775.5 million from $765 million with ongoing/expansion capex of $138.1 million/$637.4 million.

Equinix connects businesses with partners and customers worldwide through a global platform of data centers. Platform Equinix connects more than 4,000 enterprises, cloud, digital content and financial companies, including more than 690 network service providers.

EQIX is trading up 0.48% at $164.98 on Tuesday.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageReversals After a Gap on the Open Could Mean Anything

Yesterday stock indexes gapped up on the open but then reversed course to close sharply lower. This type of read on...

article imageJobless Claims Fall To 15-Year Low

After reading today’s weekly update on jobless claims the Fed’s comment yesterday that “economic activity read on...

article imageGreece, EMU and Democracy

One more post on Greece, possibly not the last read on...

article imageA Tangled Tale Of Rate Hikes & Inflation Expectations

The Federal Reserve continues to signal that it will start raising interest rates later this year, read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.