CoreSite Realty Corp (COR)
As of 10/27/2017
Industry: REIT – Data Centers
Market Cap: 5.34B
Earnings Yield: 3.16%
CoreSite delivers secure, reliable, high-performance data center and interconnection solutions to a growing customer ecosystem across eight key North American markets. More than 1,000 of the world’s leading enterprises, network operators, cloud providers, and supporting service providers choose CoreSite to connect, protect and optimize their performance-sensitive data, applications and computing workloads.
Top Majority holders are Vanguard and Blackrock, at 16% and 11% respectively. 16.33% of shares are held by insiders.
Performance and Insights
FFO per share for the quarter is 1.10, up 22% from .9 from this time last year. EPS is up from last Nine months ended, moving from 1.11 to 1.41. Operating revenues have grown by 22.8% yoy, outpacing operating expense growth of 18.6%. The increase in revenues have been attributed to a 12.8% increase in volume from new customers as well as current customers switching to higher priced fiber products. Debt is sitting at approx. $788M, with $525M set to mature sometime after 2021. Dividends are also paying at 3.16% Finally FFO this quarter is up from third quarter last year by 22.7%, growing from $44,852,000 to $55,000,000.
Most concerning to me is the high P/B and the vulnerability of data centers to cyber attacks, though coresite spends large amounts of money to ensure the security of its customers. Going forward I believe that coresite will continue to beat earnings estimates and grow as the need for cloud based applications continues to grow at amazing rates.
CoreSite just purchased land adjacent to their DC1 property in Washington D.C that will be approx. 24,000 square feet, which is 2,000 sq ft larger than the DC1 property. Construction of this facility started September 30th. With Washington DC being the 9th largest MSA in the U.S, its importance in finance, and its large need for cloud computing, it has been a prime location for large scale data centers for many years. This continued growth in DC will only help expand CoreSite further in its government, financial, and cloud applications. They also estimate that they can expand their Reston Campus Expansion by about 611,000 NRSF, which is also located in Northern Virginia.