Equinix Stock Up 18% this Year - Strong Growth

• By Tom Millitzer on April 27, 2007

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The stock market likes Equinix (NASDAQ: EQIX), and after yesterdays conference call and 1Q financial release you can see why. Revenues were 31% over the same quarter last year. EBITDA over 40%, definable expansion, refinanced debt and new CEO Stephen Smith a pervious senior HP executive.

Equinix provides data center services and collocation services in the United States and Asia. The company has a lot going on. It just completed a $70 million data center in DC. Capital expenditures could reach $370 million in 2007. Expansion includes DC, Chicago, New York and Japan. In March they also picked up $250 million in a convertible debt offering. The company has some $390 million in the war chest to fund this expansion.

Current guidance is that 2007 revenues could hit $359 to $367 million, and EBITDA of $136 - $140 million or about 38%. Investors obviously like the growth and margins; the Equinix share price has run up 18% since the first of the year.

The number I found interesting was the long term revenue growth possibilities. Given full utilization at current prices of the Equinix plant and that currently being constructed, revenues could grow to $625-$650 million. That's grow - and high margin growth to boot.

The point - this is a good sign for the sector. Smaller independent and public companies should reap some benefit also. The colocation/data center sector is definitely in favor which usually means that someone will be looking to put there money here. It may be a good time for you to expand or refinance also.

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