Is CyrusOne making money from Data Centers?

One of the most popular ways to invest in the growth of big data is data center REITs, such as CyrusOne (CONE). For example, CyrusOne’s stock price rose from $69.71 on 23 November 2020 to $89.39 on 24 November 2021.

CyrusOne Inc. (NASDAQ: CONE) is a real estate investment trust (REIT) that owns over 50 data centers in North America, Europe, and South America. For instance, CyrusOne operates data centers in 15 US states. In Europe, CyrusOne operates data centers in Spain, the United Kingdom, Germany, Ireland, and the Netherlands. In South America, CyrusOne data centers with ODATA in Colombia and Brazil.

For example, CyrusOne Madrid I is a 64,584 square foot data center in the municipality of Alcobendas. They claim CyrusOne Madrid I offers tenants 18 megawatts of IT load. CyrusOne claims Madrid I has a nine megawatt electrical plant on site.

Most of CyrusOne’s North American data centers are in Texas, Virginia, and Ohio. However, CyrusOne is building data centers in California and Washington State.

Growing with Big Data

Investors buy data center REITs such as CyrusOne (CONE) because they view them as a cheap and low-risk way to cash in on Big Data’s impressive growth.

Global big data revenue could grow from $64 billion in 2021 to $70 billion in 2022, Statista estimates. Furthermore, Statista forecasts the worldwide big data revenue could rise to $77 billion in 2023, $84 billion in 2024, $90 billion in 2025, $96 billion in 2026, and $103 billion in 2027.

Hence, Big Data is growing and making more money. Thus, CyrusOne’s customers could make more money and will require more data centers.  

Notably, CyrusOne’s revenues are growing. Stockrow estimates CyrusOne’s revenues grew by 15.72% in the quarter ending on 30 September 2021. Moreover, CyrusOne’s revenue growth rate rose from 4.74% in the quarter ending on 30 September 2020.

How Much Money is CyrusOne Making?

CyrusOne (NASDAQ: CONE) is generating revenue. Its quarterly revenues rose from $262.80 million on 30 September 2020 to $304.10 million on 30 September 2021.

Similarly, the quarterly operating income rose from -$4.6 million on 30 September 2020 to $8.50 million on 30 September 2021. However, the quarterly operating income fell from $18.60 million on 30 June 2021.

In contrast, the quarterly gross profit rose from $153.10 million on 30 September 2020 to $170.70 million on 30 September 2021. Meanwhile, the quarterly operating cash flow rose from $127.70 million on 30 September 2020 to $138.60 million on 30 September 2021.

Similarly, the quarterly ending flow rose from $85.90 million on 30 September 2020 to $86.20 million on 30 September 2021. In contrast, the quarterly financing cash flow fell from $177.80 million on 30 September 2020 to $148.50 million on 30 September 2021.

Therefore, CyrusOne only makes a little money from data centers. However, it makes a little more money from data centers than last year.

More Cash and More debt

Interestingly, CyrusOne (CONE) finished the pandemic with more debt and more cash.

For instance, the Total Debt grew from $3.472 billion on 30 June 2020 to $3.856 billion on 30 June 2021. Conversely, the cash and short-term investments rose from $158 million on 30 September 2020 to $481 million on 30 September 2021.

CyrusOne also added value during the pandemic. The Total Assets grew from $6.712 billion on 30 September 2020 to $7.34 billion on 30 September 2021. Thus, CyrusOne is a growing company.

However, I think Mr. Market overpaid for CyrusOne at $89.37 on 22 November 2021. To explain, I cannot see how a company with $7.34 billion assets is worth $89.37 a share.

Conversely, I consider CyrusOne an excellent dividend stock because it will pay four 52₵ quarterly dividends in 2022. Overall, CyrusOne (CONE) offered a $2.08 forward dividend and a 2.33% forward dividend yield on 24 November 2021.

If you are seeking a dividend stock that can grow with Big Data, I think CyrusOne is worth investigating.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.