Last week, you might have seen that Equinix, Inc. (REIT) (NASDAQ:EQIX) released its quarterly result to the market. The early response was not positive, with shares down 5.9% to US$731 in the past week. Statutory earnings per share fell badly short of expectations, coming in at US$0.74, some 55% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$1.5b. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Equinix (REIT)'s 22 analysts is for revenues of US$6.54b in 2021, which would reflect a notable 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 59% to US$8.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.52b and earnings per share (EPS) of US$8.21 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$833, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Equinix (REIT), with the most bullish analyst valuing it at US$922 and the most bearish at US$500 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Next year brings more of the same, according to the analysts, with revenue forecast to grow 13%, in line with its 15% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.9% per year. So although Equinix (REIT) is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$833, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Equinix (REIT) going out to 2024, and you can see them free on our platform here..
It is also worth noting that we have found 4 warning signs for Equinix (REIT) (1 makes us a bit uncomfortable!) that you need to take into consideration.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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