Based on the aggregated intelligence of 160,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, data center service provider Equinix (Nasdaq: EQIX) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Equinix's business and see what CAPS investors are saying about the stock right now.

Equinix facts

Headquarters (Founded)

Foster City, Calif. (1998)

Market Cap

$3.9 billion


Internet software and services

Trailing-12-Month Revenue

$882.5 million


CEO Stephen Smith (since 2007)

CFO Keith Taylor (since 2005)

Return on Capital (Average, Past 3 Years)


1-Year Return


Cash / Debt

$594.6 million / $1.5 billion



Microsoft (Nasdaq: MSFT)

Verizon (NYSE: VZ)

Key Customers

Apple (Nasdaq: AAPL)

Google (Nasdaq: GOOG) (Nasdaq: AMZN)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 39% of the 195 members who have rated Equinix believe the stock will underperform the S&P 500 going forward. These bears include All-Star mrindependent, who is ranked in the top 1% of our community, and GWKolb.

Late last week, mrindependent brought a few red flags to our community's attention:

Equinix appears on my overvalued stock screen. ... Insiders are sellers at $95 and above. Balance sheet has $900 million of net debt, which is used to finance significant [property, plant and equipment]. Historical roe stinks but has been slightly positive recently. Historical sales growth is terrific. Current p/bv is 3.45.

In a pitch from last month, GWKolb voiced skepticism over Equinix's recent purchase of fellow data center specialist Switch & Data Facilities:

I have to go with underperform on this one, largely because of valuation. They do have a dominant position and good revenue growth, however it is incredibly expensive and I'm betting against the merger/acquisition over the short term. Many times companies would be better off not merging or acquiring other players because they simply destroy value. Plus, mergers/acqs never go as smoothly as planned.

What do you think about Equinix, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Apple and Amazon are Motley Fool Stock Advisor picks. Google is a selection of Rule Breakers. Microsoft is an Inside Value choice, and Motley Fool Options has recommended a diagonal call position on it. The Fool's disclosure policy always gets a perfect score.