INXN Stock: The Rising Data Center Star

Interxion Stock
Credit: iStock.com/peshkov

Interxion Stock Continues to Impress

Today’s stock represents one of our favourite strategies of investing in growth stocks. By investing in stocks that stand to gain from the rise of the digital economy, investors can make triple-digit returns if they choose their stocks carefully and wisely. Stocks of such companies stand to grow in the coming years as the business gains from exposure to the popular technology trends of today like cloud computing and increasing data consumption.    

The case in point being InterXion Holding NV (NYSE:INXN), which is a leading provider of cloud and carrier-neutral colocation data center services in Europe. The company has over 1,600 customers with data centers across 11 countries and enables these customers to securely deliver mission-critical applications and content to their own customers. Its state-of-the-art data centers provide space, power, and cooling with performance and reliability that surpasses industry standards.

The company has expanded rapidly to create 45 data centers, which gives it the largest reach across Europe. Over the next few years, INXN stock has further upside potential as the growth in response-time-sensitive applications and data, including cloud platforms and digital media, will continue to strengthen the value of the company’s highly connected data centers.

The business looks upbeat as the shift to the cloud is transforming IT and driving the migration of workloads from enterprise data centers to third-party facilities.

InterXion’s data centers enable customers to connect to a broad range of telecommunications carriers, Internet service providers, and other customers. Its core offering of carrier and cloud-neutral colocation services includes space, power, cooling, and a physically secure environment, which houses the IT infrastructure. The company’s services help customers reduce operational and capital costs while improving application performance and flexibility.

Moreover, with the scalable colocation services, customers can upgrade space, connectivity, and services as their requirements evolve.

As per a recent research report by MarketsandMarkets Research Private Ltd., the Data Center Colocation market is expected to reach more than $60.0 billion by 2022. From $31.52 billion in 2017, the market size is expected to grow to $62.3 billion by 2022, representing a CAGR of 14.6%. (Source: “Data Center Colocation Market – Global Forecast to 2022,” MarketsandMarkets, July 2017.)

The growth of this market is driven by the growing requirement for scalable data centers, which are cost-effective and can handle the growing complexities of modern digital enterprises.

InterXion is in a strong position to capitalize on this market growth. As consumption of data increases on mobile and other devices, cloud computing continues to grow and new technologies like AI gather pace, demand for infrastructure and services provided by InterXion shall keep on increasing. This bodes well for INXN stock.

The company has been posting impressive results and has been disciplined with the use of its financial resources. Interxion reported third-quarter results in November. The company delivered strong financial and operational results in the third quarter with 18% revenue growth year-over-year, driven by 21% revenue growth in its big four markets and 14% growth in the rest of Europe. (Source: “Interxion Reports Third Quarter 2017 Results,” Interxion, November 1, 2017.)

There were strong and well-diversified bookings in the quarter. The company also increased its full-year revenue guidance. Interxion also announced the expansion of its Frankfurt campus footprint and the further build out if its Dublin and Zurich data centers.

The impressive growth has been reflected in the rise of Interxion stock. INXN stock has posted gains of over 140% in the last five years and over 60% in the last one year.

INXN stock chart

Chart courtesy of StockCharts.com

Interxion focuses on targeting new customers in high growth industry segments like digital media, financial services, cloud providers and connectivity providers. This strategy has paid off as evident from the recent results. With solid execution, both the business and INXN stock shall do better in the coming days.

Analyst Take 

Interxion provides the critical infrastructure and services that powers the strong technology trends of today, like cloud computing and social media.

The company has a vast network of carrier-neutral data centers and their rising demand will translate into an effective and impressive growth for the company.

Interxion stock gives investors the opportunity to benefit from these broad secular trends and the rise of digital enterprises will create a bigger market for the company’s products and services. With future demand expected to remain buoyant, INXN stock stands to gain further in the coming years.