Strength Seen in Equinix (EQIX): Can Its 5.3% Jump Turn into More Strength?

Equinix EQIX shares soared 5.3% in the last trading session to close at $785.11. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 16% loss over the past four weeks.

The increased investor optimism in the stock can be attributed to the favorable operating environment.

This data center operator is expected to post quarterly funds from operations (FFO) of $9.21 per share in its upcoming report, which represents a year-over-year change of -0.1%. Revenues are expected to be $2.26 billion, up 4.5% from the year-ago quarter.

FFO and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in FFO estimate revisions are strongly correlated with near-term stock price movements.

For Equinix, the consensus estimate for FFO per share for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in FFO estimate revisions. So, make sure to keep an eye on EQIX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Equinix is part of the Zacks REIT and Equity Trust - Retail industry. Agree Realty (ADC), another stock in the same industry, closed the last trading session 0.9% lower at $72.35. ADC has returned -1.9% in the past month.

Agree Realty's consensus FFO per share estimate for the upcoming report has remained unchanged over the past month at $1.06. Compared to the company's year-ago FFO per share, this represents a change of +1.9%. Agree Realty currently boasts a Zacks Rank of #4 (Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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