Equinix, Inc.EQIXNASDAQ

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

DCF Valuation

DCF Valuation Summary

Hold

Fair Value: $978.39 per share(market-calibrated)

+1.3%

Upside to Fair Value

Current

$966.10

Pure Model

$970.90

Fair Value

$978.39

Bull Case

$1,385.07

Bear Case

$643.42

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

3.13%

Calibrated Growth

2.59%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $970.90.

What's Driving This Ratingfor EQIX

↓

CapEx normalizing toward maintenance

Historical CapEx is 32.80% of revenue (heavy investment phase). Model fades this to 2.50% by Year 10, freeing up ~$5.9B in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 28.47% — below the sector mature average of 30.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $5.7B (29.50% margin).

↑

Strong near-term revenue growth

Analyst consensus projects 10.06% revenue growth in Year 1, fading to 10.28% by Year 5 and 2.50% by Year 10. Revenue reaches $19.5B by Year 10 (vs $9.3B today).

✓

Model and market roughly agree

Market-implied terminal growth of 3.13% is close to the model's 2.50% (only 63bps apart). The DCF assumptions are well-aligned with how the market is pricing this stock.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 88.34% indicates efficient cash generation. FCF reaches $8.5B by Year 10 (43.84% 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)80.62%

Debt Weight (D/V)19.38%

WACC Calculation

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

WACC = (80.62% × 9.30%) + (19.38% × 1.67%)

= 7.82%

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	$14.8B	$17.3B	$19.5B
EBIT	$2.9B	$3.4B	$4.2B	$5.0B	$5.7B
Tax	$308M	$366M	$448M	$532M	$610M
NOPAT	$2.6B	$3.1B	$3.8B	$4.5B	$5.1B
+ Depreciation	$2.1B	$2.4B	$3.0B	$3.5B	$3.9B
- Capex	$3.3B	$3.2B	$2.9B	$2.2B	$487M
- Δ NWC	$59M	$64M	$88M	$73M	$30M
Free Cash Flow	$1.2B	$2.3B	$3.8B	$5.7B	$8.5B
Discount Factor	0.927	0.798	0.686	0.590	0.471
Present Value	$1.2B	$1.8B	$2.6B	$3.4B	$4.0B

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

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$8.5B

Terminal Growth Rate2.50%

WACC7.82%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$164.4B

PV of Terminal Value$77.4B

Exit Multiple Method

Year 10 EBITDA$9.7B

Exit Multiple (EV/EBITDA)22.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$212.6B

PV of Terminal Value$100.1B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$27.3B

PV of Terminal Value$77.4B

Enterprise Value$104.7B

(-) Net Debt$21.0B

Equity Value$83.7B

Shares Outstanding98M

Price per Share$854.98

Exit Multiple Method

PV of Projected FCFs$27.3B

PV of Terminal Value$100.1B

Enterprise Value$127.4B

(-) Net Debt$21.0B

Equity Value$106.4B

Shares Outstanding98M

Price per Share$1,086.82

Pure Model Fair Value

$970.90

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%
5.82%	$1,298.80	$1,378.12	$1,481.30	$1,621.04	$1,820.95
6.82%	$1,072.77	$1,119.68	$1,177.44	$1,250.32	$1,345.13
7.82%	$905.10	$935.18	$970.90	$1,014.04	$1,067.16
8.82%	$773.68	$794.07	$817.70	$845.37	$878.25
9.82%	$666.79	$681.21	$697.59	$716.37	$738.13

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

$643.42

-33.4% vs current

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

Base Case

$970.90

0.5% vs current

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

Bull Case

$1,385.07

43.4% 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 Growth10.06%

Year 3 Revenue Growth9.13%

Year 5 Revenue Growth10.28%

Year 7 Revenue Growth7.17%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin28.47%

Terminal EBIT Margin30.00%

Tax Rate10.61%

Historical Capex / Rev32.80%

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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