What to Expect When Switch Reports After the Close

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Switch Inc. (NYSE: SWCH) is scheduled to release its most recent quarterly results after the markets close on Monday. This will be the third earnings report the company has released since it came public in October of last year. The consensus estimates from Thomson Reuters call for $0.05 in earnings per share on $99.83 million in revenue.

Switch claims more than 800 customers for its three data center locations, encompassing 10 colocation centers on some 4 million square feet of floor space. The three centers are located in Las Vegas, Reno and Grand Rapids. A fourth, in Atlanta, has been announced.

About 95% of the company’s revenues come from recurring revenue streams from colocation (cabinet and power) services and connectivity devices. Customer contracts typically run for three to five years. That predictability of revenue is a big plus for the company.

So are the prospects for increased data traffic over the next several years and demand for more and faster data transfer as the Internet of Things expands at a compound annual growth rate of 68% from 2015 through 2020.

 

Over the past six months, Switch has underperformed the broad markets, with its stock down about 16.5%. In 2018 alone, the stock is down closer to 16%.

A few analysts weighed in on Switch ahead of the report:

  • Credit Suisse has a Buy rating with a $22 price target.
  • Cowen has a Market Perform rating.
  • William Blair has an Outperform rating.
  • BMO Capital Markets has an Outperform rating and a $20 price target.
  • Raymond James has an Outperform rating.
  • UBS has an Outperform rating.

Shares of Switch were last seen down about 0.5% at $15.33 on Monday, with a consensus analyst price target of $17.95 and a 52-week range of $13.10 to $24.90.