Equinix is down -1.04 percent despite market rise
 | By Vlad Skutelnik | Macroaxis Story |
Today post will break down Equinix. I will inspect why investors should continue to be optimistic in the company outlook. This firm Piotroski F Score is 5 - Healthy. Given the investment horizon of 30 days, Equinix is expected to generate 53.11 times less return on investment than the market. In addition to that, the company is 1.05 times more volatile than its market benchmark. It trades about 0.0 of its total potential returns per unit of risk. The market is currently generating roughly 0.07 per unit of volatility. Equinix shows prevailing Real Value of $569.31 per share. The current price of the firm is $544.71. At this time the firm appears to be undervalued. This module computes value of Equinix from reviewing the firm fundamentals such as Shares Outstanding of 84.82 M, Profit Margin of (0.06) and Current Valuation of 58.7 B as well as analyzing its technical indicators and Probability Of Bankruptcy. In general, we advise to go long with undervalued instruments and to sell out overvalued instruments since at some point assets prices and their ongoing real values will submerge.
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Reviewed by Gabriel Shpitalnik
EQUINIX INC currently holds roughly 1.61 B in cash with 1.54 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 19.02. Equinix dividends can provide a clue to current valuation of the stock. The firm one year expected dividend income is about $4.68 per share. The company has Profit Margin (PM) of (0.06) % which may suggest that it does not properly executes on its current pricing strategies or is unable to control all of the operational costs. This is way below average. Similarly, it shows Operating Margin (OM) of 44.41 % which suggests for every 100 dollars of sales it generated a net operating income of 0.44.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Equinix. Your research has to be compared to or analyzed against Equinix's peers to derive any actionable benefits. When done correctly, Equinix's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Equinix.
Investing in Equinix, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Equinix along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Equinix's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Equinix's Liquidity
Equinix financial leverage refers to using borrowed capital as a funding source to finance Equinix ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Equinix financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Equinix's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Equinix's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Equinix's total debt and its cash.
Equinix Gross Profit
Equinix Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Equinix previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Equinix Gross Profit growth over the last 10 years. Please check Equinix's gross profit and other fundamental indicators for more details.
Equinix Correlation with Peers
Investors in Equinix can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Equinix. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Equinix and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Equinix is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of Equinix for more details
Breaking down the case for Equinix
The current investor indifference towards the small price fluctuations of Equinix could raise concerns from investors as the firm closed today at a share price of 539.32 on 524028.000 in volume. The company directors and management did not add any value to Equinix investors in October. However, most investors can still diversify their portfolios with Equinix to hedge your portfolio against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.3979. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. Equinix reports 1.61 b cash and equivalents. Equinix is selling for 544.71. This is 1.04 percent down. Started trading at 544.71. Equinix Tangible Asset Value is decreasing over the last 4 years. Equinix Calculated Tax Rate is decreasing over the last 5 years. Additionally, Equinix Enterprise Value is fairly stable at the moment. To sum up, we see that Equinix Slowly supersedes market. The company is undervalued with very low probability of distress within the next 24 months. Our immediate buy-hold-sell recommendation on the company is Hold.
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