May 25, 2023
Top 10 Stock Equinix Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Equinix – Top 10 Stock in Employee Satisfaction Leaders in the United States
Equinix is listed as a top 10 stock on May 25, 2023 in the market index Employee Focus US because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 75 (top 75% performer), Obermatt assesses an overall strong buy recommendation for Equinix on May 25, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | REITs: Specialized |
| Index | Low Emissions, Employee Focus US, Renewables Users, R/E USA, NASDAQ, S&P 500 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Equinix Strong Buy
| 360 METRICS | May 25, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 6 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 91 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 63 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 80 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 75 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 75 (better than 75% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Equinix are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Equinix. The consolidated Growth Rank has a good rank of 91, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 91% of competitors in the same industry. The consolidated Safety Rank at 63 means that the company has a financing structure that is safer than 63 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 80, which means that professional investors are more optimistic about the stock than for 80% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 6, meaning that the share price of Equinix is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 94% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a 360° View of 75, Equinix is better than 75% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 91), a safe financing structure (Safety Rank of 63), and positive professional market sentiment (Sentiment Rank of 80), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Equinix compared with alternatives? You can use the following rule of dumb: The growth rank reflects where the growth momentum of the company is (91% better than peers). The value rank could be the reverse reflection of that (9%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Equinix very positive
ANALYSIS: With an Obermatt Sentiment Rank of 80 (better than 80% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Equinix is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Equinix. Analyst Opinions are at a rank of 79 (better than 79% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 80, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 71, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 71% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 45, which means that currently, professional investors hold less stock in this company than in 55% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 80 (more positive than 80% compared with investment alternatives), Equinix has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in Equinix may be less of an issue, especially if the stock is from a smaller company. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Equinix. ...read more
Value Strategy: Equinix Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 6 (worse than 94% compared with alternatives), Equinix shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Equinix. Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than 66% of comparable companies, indicating a low value concerning Equinix's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 8, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Equinix. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 3 and Dividend Yield, which is lower than 78% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 6, is a SELL recommendation based on Equinix's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Equinix? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Equinix? It's risky, and even if it continues to grow because of popular demand, it will most likely return to what it's worth. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is reasonable for the company to dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Equinix may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Equinix Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 91 (better than 91% compared with alternatives) for 2023, Equinix shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Equinix. Sales Growth has a rank of 64 which means that currently, professionals expect the company to grow more than 64% of its competitors. Both Profit Growth, with a rank of 75, and Stock Returns, with a rank of 87, are also above average. But Capital Growth only has a rank of 43, which means that, currently, professionals expect the company to grow its invested capital less than 57% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 91, is a BUY recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Equinix Debt Financing Safety above-average
| SAFETY METRICS | May 25, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 38 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 71 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 45 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 63 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), the company Equinix has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Equinix is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Equinix and the other two below average. Refinancing is at 71, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 71% of its competitors. But Leverage is high with a rank of 38, meaning the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. Liquidity is also on the riskier side with a rank of 45, meaning the company generates less profit to service its debt than 55% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), Equinix has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Equinix are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making a financial decision. ...read more
Combined financial peformance: Equinix Above-Average Financial Performance
| COMBINED PERFORMANCE | May 25, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 6 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 91 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 45 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 57 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 57 (better than 57% compared with investment alternatives), Equinix (REITs: Specialized, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Equinix are low in value (priced high) with a consolidated Obermatt Value Rank of 6 (worse than 94% of alternatives). But they show above-average growth (Growth Rank of 91) and are safely financed (Safety Rank of 63, which means below-average debt burdens). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 57, is a buy recommendation based on Equinix's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Equinix exhibits low value (Obermatt Value Rank of 6), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 91). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 63) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.