Akamai reported strong fourth quarter results beating the Zacks
Consensus Estimate on both lines. The company also provided
positive outlook for 2014. We believe 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, going forward. In order to differentiate its
products, Akamai is significantly investing in R&D and is also
expanding its sales force through new appointments. This will
negatively impact profitability, going forward. Thus, we remain
Neutral and set a price target of $61.00.
Headquartered in Cambridge, Mass., 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
Akamai reported revenues of $1.37 billion, up 19% year over year
in 2012. 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
Akamai earns revenues through five industry verticals namely
Media & Entertainment, Commerce, Enterprise, High Tech and
Public Sector. 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 22.0% of total revenue in 2012. The
company derived 72.0% of its revenues from the U.S., while the
remaining 28.0% came from its foreign operations, of which Europe
alone accounted for 17% in 2012.
Akamai Technologies Inc. (AKAM): Read the Full
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