Akamai Technologies Inc. (AKAM): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

By
A A A

Summary:
Akamai reported strong first-quarter results, beating the Zacks Consensus Estimate on both lines. The company also provided a positive outlook for the remainder of 2014. We believe that strong demand for cloud infrastructure solutions, security, mobile products and online video will drive top-line growth, going forward. Moreover, the company's dominance in the web application business is expected to be a significant growth catalyst, going ahead. However, intense competition has kept pricing under tremendous pressure, which is a significant headwind. In order to differentiate its products, Akamai is heavily investing in research & development and is also expanding its sales force through new appointments. Although this will boost revenues over the long run, it will keep margins under pressure in the near term. Thus, we remain Neutral on the stock and set a price target of $63.00.

Overview:

Headquartered in Cambridge, MA., Akamai Technologies, Inc. (AKAM) is a global provider of content delivery network (CDN) and cloud infrastructure services. The company's solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming video & audio, business applications, etc. Its offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.

The company's solutions allow its customers to operate their web transactions anywhere anytime with cost-effective outsourced infrastructure and carry out predictable, scalable and secure e-business at low costs. These solutions are built on the Akamai EdgePlatform, which is the technological platform for its business solutions and hosts some of the world's best-known Internet brand names, such as iTunes. Akamai's platform comprises more than 141,000 servers located in over 1,200 networks around the world.

Akamai reported revenues of $1.58 billion in 2013, up 15.3% year over year. The company offers five core solutions to its customers namely Terra, Aqua, Sola, Kona and Aura. Through these solutions, the company provides application and cloud performance services (Terra), digital media, software distribution and storage services (Sola), website optimization services (Aqua), security tools (Kona), network operator solutions and other Internet-based offerings (Aura).

The company markets and sells its services and solutions both domestically and internationally through direct sales and more than 100 active channel partners, including AT&T, IBM, Verizon and Telefonica Group. Resellers accounted for 21.0% of total revenue in 2013. The company derived 71.0% of its revenues from the U.S., while the remaining 29.0% came from its foreign operations.


Akamai Technologies Inc. (AKAM): Read the Full Research Report
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AKAMAI TECH (AKAM): Free Stock Analysis Report

To read this article on Zacks.com click here.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: AKAM

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

61,354,178
  • $10.59 ▲ 13.26%
57,732,182
  • $16.27 ▲ 1.12%
51,991,548
  • $103.30 ▲ 0.78%
48,129,834
  • $20.65 ▲ 5.52%
41,623,916
  • $12.63 ▲ 8.13%
34,295,241
  • $76.68 ▲ 2.49%
31,519,079
  • $34.57 ▼ 1.00%
28,847,879
  • $3.64 ▲ 0.28%
As of 9/2/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com