Equinix, Inc.EQIXNASDAQ

Overview Intelligence Charts News Fundamentals DCF Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Hold

Fair Value: $833.36 per share(market-calibrated)

-9.7%

Upside to Fair Value

Current

$923.21

Pure Model

$820.82

Fair Value

$833.36

Bull Case

$1,191.26

Bear Case

$528.57

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

3.61%

Calibrated Growth

2.67%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $820.82.

What's Driving This Ratingfor EQIX

↓

CapEx normalizing toward maintenance

Historical CapEx is 32.96% of revenue (heavy investment phase). Model fades this to 2.50% by Year 10, freeing up ~$5.8B in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 17.62% — below the sector mature average of 30.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $4.9B (25.94% margin).

↑

Strong near-term revenue growth

Analyst consensus projects 10.40% revenue growth in Year 1, fading to 9.77% by Year 5 and 2.50% by Year 10. Revenue reaches $19.1B by Year 10 (vs $9.2B today).

🎯

Market pricing in higher long-term growth

To justify $923.21, the market implies 3.61% perpetual growth — 111bps above the model's 2.50%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 88.29% indicates efficient cash generation. FCF reaches $7.8B by Year 10 (40.76% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.07

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.30%

Cost of Debt

Pre-tax Cost of Debt1.87%

Tax Rate10.61%

After-tax Cost of Debt1.67%

Equity Weight (E/V)79.90%

Debt Weight (D/V)20.10%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (79.90% × 9.30%) + (20.10% × 1.67%)

= 7.77%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$10.2B	$12.1B	$14.7B	$17.0B	$19.1B
EBIT	$1.8B	$2.1B	$2.6B	$3.7B	$4.9B
Tax	$190M	$226M	$274M	$398M	$525M
NOPAT	$1.6B	$1.9B	$2.3B	$3.4B	$4.4B
+ Depreciation	$2.1B	$2.4B	$3.0B	$3.4B	$3.9B
- Capex	$3.4B	$3.2B	$2.8B	$2.1B	$477M
- Δ NWC	$61M	$63M	$83M	$69M	$29M
Free Cash Flow	$246M	$1.1B	$2.3B	$4.6B	$7.8B
Discount Factor	0.928	0.799	0.688	0.592	0.473
Present Value	$228M	$894M	$1.6B	$2.7B	$3.7B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$7.8B

Terminal Growth Rate2.50%

WACC7.77%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$151.3B

PV of Terminal Value$71.6B

Exit Multiple Method

Year 10 EBITDA$8.8B

Exit Multiple (EV/EBITDA)22.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$193.7B

PV of Terminal Value$91.7B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$19.7B

PV of Terminal Value$71.6B

Enterprise Value$91.3B

(-) Net Debt$21.0B

Equity Value$70.3B

Shares Outstanding98M

Price per Share$718.21

Exit Multiple Method

PV of Projected FCFs$19.7B

PV of Terminal Value$91.7B

Enterprise Value$111.4B

(-) Net Debt$21.0B

Equity Value$90.4B

Shares Outstanding98M

Price per Share$923.44

Pure Model Fair Value

$820.82

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
5.77%	$1,120.03	$1,194.59	$1,291.96	$1,424.51	$1,615.53
6.77%	$912.45	$956.31	$1,010.44	$1,078.94	$1,168.40
7.77%	$759.47	$787.49	$820.82	$861.15	$910.93
8.77%	$640.19	$659.14	$681.11	$706.89	$737.56
9.77%	$543.59	$556.95	$572.15	$589.60	$609.84

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$528.57

-42.7% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.33

Base Case

$820.82

-11.1% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 1.07

Bull Case

$1,191.26

29.0% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.91

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Real Estate Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth10.40%

Year 3 Revenue Growth8.98%

Year 5 Revenue Growth9.77%

Year 7 Revenue Growth6.86%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin17.62%

Terminal EBIT Margin30.00%

Tax Rate10.61%

Historical Capex / Rev32.96%

Terminal Capex / Rev2.50%

NWC / Revenue6.33%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 22x EV/EBITDA (Real Estate sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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