Analyst Note
| Matthew Dolgin |Equinix reported a fantastic first quarter that included revenue and margins both eclipsing guidance the firm gave last quarter. Management raised full-year sales guidance by more than the magnitude of the first-quarter beat while raising EBITDA guidance in line with the first-quarter outperformance. While business looks very strong, and pricing power certainly exists, the next few quarters won’t benefit from the same tailwinds that the first quarter did. Most notably, Equinix’s higher hedge rates on power costs won’t go into effect until the second quarter, but corresponding price increases that Equinix passed through to customers took effect in the first quarter. Still, the impressive first-quarter results and the general strength that continually persists throughout Equinix’s business leads us to raise our fair value estimate to $620 from $580.