Equinix (EQIX): Revisiting Valuation After a 21% Year-to-Date Share Price Decline

Equinix (EQIX) has been drifting lower this year, even though its business continues to grow. With the stock down about 21% year to date, investors are starting to revisit the valuation.

See our latest analysis for Equinix.

The recent slide, including a 1 month share price return of minus 9.8 percent and year to date share price return of minus 21.5 percent, contrasts with a still positive 3 year total shareholder return of 16.8 percent. This suggests momentum has cooled even as the long term story remains intact.

If Equinix’s reset has you reassessing the digital infrastructure space, it could be a good moment to compare it with other high growth tech and AI names via high growth tech and AI stocks

With shares trading at a hefty discount to analyst targets despite solid revenue and earnings growth, the key question now is whether Equinix is genuinely undervalued or if the market has already priced in its next leg of expansion.

Most Popular Narrative Narrative: 23.2% Undervalued

With Equinix last closing at $741.58 against a narrative fair value near $965, the story leans toward upside, hinging on long haul earnings power.

The rapid expansion and customer adoption of Equinix Fabric and interconnection services (with 8% Y/Y growth, over 4,000 customers, and record interconnection revenue) create new high margin, asset light revenue lines, supporting expansion of overall net margins.

Read the complete narrative.

Curious how recurring, higher margin services, rising earnings, and a premium future profit multiple all fit together? The narrative connects these pieces in a surprisingly aggressive roadmap. Want to see the assumptions powering that fair value jump?

Result: Fair Value of $965.56 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside hinges on flawless execution, and heavy capital needs along with hyperscaler concentration could quickly pressure margins if demand or financing conditions shift.

Find out about the key risks to this Equinix narrative.

Another Take on Valuation

Multiples tell a different story. Equinix trades on a steep 68x price to earnings ratio, versus 28.6x for the US Specialized REITs sector and 31.2x for peers, and well above its own 33.7x fair ratio. That gap points to real multiple compression risk if growth ever wobbles.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Equinix Narrative

If this view does not fully align with your thinking, or you would rather dig into the numbers yourself, you can build a custom narrative in just a few minutes, starting with Do it your way

A great starting point for your Equinix research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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