Analyst Note| Matthew Dolgin, CFA |
Equinix’s second quarter was strong in virtually every aspect, as the firm exceeded FactSet consensus revenue estimates and raised its full-year guidance. The second half is unlikely to be quite as strong as the first, as the firm laps 2020 cross connect price increases and sees some margin pressure. Everything Equinix has reported, however, indicates the long-term trajectory remains extremely positive, as enterprises continue to transform and integrate their networks to hybrid cloud and multicloud architectures that lead them to Equinix and the cloud providers that have onramps at Equinix facilities. We continue to have valuation concerns about the stock, as the $520 fair value estimate we are maintaining implies the stock is significantly overvalued. However, we don’t expect any hiccups in Equinix’s business to be a catalyst to drive the stock lower.