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Equinix (EQIX) Expands in Paris With New IBX Data Center

Zacks Equity Research
·3 min read

Boosting its presence in Paris, Equinix Inc. EQIX recently opened an International Business Exchange (“IBX”) data center in the French market. The new site named PA10 marks the 10th data center opened by Equinix in Paris over a span of 20 years.

PA10 is integral to Equinix's Saint-Denis campus and will aid growth in the local digital economy and drive digital transformation strategies in the French market. Moreover, with comprehensive digital ecosystems, the data center will help customers connect directly and securely to the world's digital economy.

The addition seems beneficial to Equinix as Per Global Interconnection Index, Paris probably the fastest growing core metro in Europe and an important ecosystem for the transport, energy and utilities sectors. Paris is also the termination point for many undersea cable systems in the Mediterranean and brings providers from Africa, the Middle East and the Asia-Pacific to Europe.

Equinix’s effort to bolster its presence in the country will add scale and strengthen its position in the region, while helping it benefit from the accelerations in digital infrastructure transformations.

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EQIX made an initial investment of $163 million for this new build and a total investment of more than US$1B to date in France's digital infrastructure.

The first phase of this new site will provide 3,775 square feet to EQIX's co-location space with 1,525 cabinets of capacity. Upon completing all planned phases, the full site is expected to generate 5,775 square feet of colocation space with roughly 2,250 cabinets.

Equinix is well positioned, globally, to bank on robust demand for data-center spaces with its Platform Equinix, which comprises more than 230 data centers across 65 metros and 27 countries.

Robust growth in cloud computing, the Internet of Things and big data, and a greater call for third-party IT infrastructure are spurring demand for the data-center infrastructure. Growth in artificial intelligence, autonomous vehicle and virtual/augmented reality markets will likely be solid in the upcoming year.

Nonetheless, intense competition from carrier-neutral data centers is concerning. Also, huge capital outlays required for expansion moves act as headwinds.

Shares of Equinix have declined 4.2% over the past three months compared with the industry's fall of 1.6%.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the REIT sector are Extra Space Storage EXR, OUTFRONT Media OUT and CubeSmart CUBE.

Extra Space flaunts a Zacks Rank #1 (Strong Buy) at present. Shares of EXR have gained 20.8% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Extra Space’s 2021 FFO per share has been raised marginally over the past two months. Over the last four quarters, EXR’s FFO per share surpassed the consensus mark on all occasions, the average being 5.9%.

OUTFRONT Media flaunts a Zacks Rank of 1 at present. Shares of OUT have gained 17.9% in the past six months.

The Zacks Consensus Estimate for OUTFRONT Media’s 2021 FFO per share has been raised 11.2% over the past month. Over the last four quarters, OUT’s FFO per share surpassed the consensus mark on three occasions and came in line with the same in the remaining quarter, the average beat being 44.9%.

The Zacks Consensus Estimate for CubeSmart’s 2021 FFO per share has been raised 2.4% in the past two months. Over the last four quarters, CUBE’s FFO per share surpassed the consensus mark on all occasions, the average being 7.1%.

Currently, CUBE sports a Zacks Rank of 1. Shares of CubeSmart have appreciated 7.6% in the past six months.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.


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OUTFRONT Media Inc. (OUT) : Free Stock Analysis Report

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