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Equinix, Inc. (EQIX) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Equinix, Inc. (EQIX)

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Intrinsic Value (DCF)

Current$801.82
→
Intrinsic$448.10
-44%
$246.52$448.10$849.34
Market implies 21% growth for 5 years
Current price reflects execution expectations above 9% growth — not unreasonable for quality businesses.
At $802, the market prices in continued strong cash flow growth (21%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $247 → Bull $849. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →5%7%9%11%
8%$587$655$729$808
10%$353$399$448$501
12%$230$264$300$338
14%$154$180$208$238

Bull Case

  • Bull case ($849) offers 6% upside at 11% growth, 8% discount
  • Conservative 9% growth assumption is achievable based on track record

Bear Case

  • Bear case ($247) implies 69% downside at 8% growth, 12% discount
  • Price reflects 21% growth expectations vs 9% historical — high bar to clear
  • Trading 44% above base case — execution must exceed assumptions to justify
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5-Year FFO Projection

Year 1$3.09B
Year 2$3.38B
Year 3$3.71B
Year 4$4.06B
Year 5$4.44B
Terminal$70.38B

📐 Model Inputs

Growth Rate9.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$2.82BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is EQIX stock undervalued or overvalued?
🔴 OVERVALUED

EQIX trades at $801.82 vs. our DCF-derived intrinsic value of $448.10, implying -43% downside. Using a 9.5% WACC and 9.5% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($704.11) suggests limited upside.

What is EQIX's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.82B, projected at 9.5% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $15.88B net debt and dividing by 0.10B shares: Bear $265.46 | Base $448.10 | Bull $704.11. Current price $801.82 implies -43% to base case.

How is EQIX's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 9.5% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($58.82B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 20.8x.