On Feb 11, 2014, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy). The upgrade came on the back
of positive estimate revisions over the last 30 days. Akamai also
delivered positive earnings surprises in the last four quarters
with an average beat of 6.2%.
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Why the Upgrade?
Upbeat fourth quarter results contributed to the upgrade. The
outperformance was driven by a stronger-than-expected growth in
revenues and earnings per share. Also, the speculation that had
been going on for some time regarding whether
) would develop a CDN of its own has been put to rest as per
Akamai reported fourth quarter earnings of 55 cents per share,
which increased 10.0% on both year-over-year and
quarter-over-quarter basis. Revenues jumped 15.4% year over year
and 10.2% quarter over quarter to $436.0 million, well ahead of
the Zacks Consensus Estimate of $422.0 million.
Revenues were higher than management's guided range of $412.0 to
$430.0 million. The strong growth in revenues was primarily
driven by robust performance of most of the categories and
Akamai expects revenues for the first quarter of 2014 to be in
the range of $426.0 million and $440.0 million. The company
expects gross margin (excluding stock-based compensation and
depreciation and amortization) to remain flat sequentially at
78.0%. Operating expenses are projected to be in the range of
$145.0 to $150.0 million.
Earnings are expected to be between 51 cents and 55 cents per
share, including tax charge of $48.0 to $52.0 million. Akamai
forecasts capital expenditure to be in the range of $72.0 to
$77.0 million for the first quarter.
Over the last 30 days, Akamai witnessed three upward revisions
for the current quarter and four upward revisions for fiscal
2014. The Zacks Consensus Estimate for the current quarter went
up by a penny to 41 cents per share while the same for fiscal
2014 went up by 4 cents to $1.80 per share.
The long-term expected earnings growth rate for Akamai is 13.9%.
Other Stocks to Consider:
Other players in the industry, which look attractive at current
), both with a Zacks Rank #1 (Strong Buy).