Cloud adoption is accelerating in Europe, and InterXion's (NYSE:INXN)
portfolio of high-quality carrier/cloud-neutral interconnection-focused
data centers across major markets is a high-value asset. Utilization is
healthy, margins are improving, and the company is looking down an
attractive growth runway. It also doesn't hurt that InterXion is an
attractive, "gettable" standalone asset that could attract M&A
interest.
The "but" for me is that I struggle to
find the value in the shares at this price. I won't necessarily disagree
that InterXion could be taken out at a price above today's level and
still make sense for the buyer, but I hate relying on M&A-based
valuations as my primary valuation method. Looking at other approaches
like EV/EBITDA and discounted cash flow, though, suggests that the
market is already more than up to speed on the potential here, and I
believe InterXion will have to produce double-digit long-term revenue
growth to drive a higher price.
Read the full article here:
InterXion's Data Center Opportunity Is Exciting, But The Valuation Is Demanding
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