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Key Takeaways
- Equinix shares sank for a second straight session as investors reacted to the company’s new long-term targets.
- The firm said at its annual analyst day that it expects 7% to 10% revenue growth through 2029 as it increases its data center capacity to meet growing demand.
- UBS analysts said the targets were in line with estimates over the long-term, but “point to a near-term slowdown” in profit growth as it invests more to drive sales.
Equinix (EQIX) shares slumped for a second day Thursday, posting the biggest intraday decline among S&P 500 companies the data center company laid out its growth targets for the next several years.
At its annual analyst day Wednesday, Equinix said it expects revenue to grow by 7% to 10% annually through 2029. Its adjusted earnings before interest, taxes, depreciation, and amortization margin is projected to hit at least 52% by 2029, while adjusted funds from operations are expected to grow from 5% to 9% through 2029, starting at the lower end and eventually reaching the higher end of the range.
Those targets are forecast as Equinix looks to double the capacity across its data center network by the end of 2029, the company said in a presentation.
UBS analysts said the targets were “largely in line with expectations on a longer term basis but point to a near-term slowdown in per share growth as investments to accelerate top-line growth ramp.”
Equinix shares fell nearly 10% Thursday after a 9% drop Wednesday, putting them down more than 20% since the start of the year.
UBS analysts held their $1,035 price target and “buy” rating, adding that they “believe industry fundamentals and secular trends remain supportive but updated financial targets point to a near-term estimate reset and more meaningful acceleration in growth to ’27.”
This article has been updated since it was first published to reflect more recent share price values.
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