Equinix

Methodology

Equinix is a REIT where EPS has limited meaning—FFO (Funds From Operations) is the proper earnings metric for interconnection-focused data center real estate. Depreciation distorts GAAP earnings while FFO better reflects cash generation from colocation and interconnection services. Investors should use FFO-based valuation methods rather than traditional P/E ratios for this data center REIT.

Methodology

PEG ratios based on EPS are inappropriate for Equinix—FFO growth is the relevant metric for REIT valuation. The interconnection leader delivers high-single-digit FFO growth from new deployments and strong pricing power. Data center REITs trade more on implied cap rates and FFO multiples than earnings-based metrics given their infrastructure characteristics.

Methodology

Equinix pays a dividend yielding 2-3%, making total return analysis important, though PEGY using EPS remains flawed for REITs. The dividend represents a portion of FFO with room for growth as the business scales. Investors should evaluate total return using FFO growth plus dividend yield rather than EPS-based PEGY calculations.