Akamai Technologies, Inc.
) is set to report second quarter 2014 results on Jul 30. Last
quarter, it posted a 6.82% positive surprise. The company has
posted an average positive earnings surprise of 2.74% over the past
Let's see how things are shaping up for this announcement.
Growth Factors this Past Quarter
We believe that strong demand for cloud infrastructure solutions,
security, mobile products and online video will drive top-line
growth. Akamai's partnership with the likes of AT&T,
International Business Machines, Orange, Swisscom, Korea Telecom
and Türk Telekom is expected to boost top-line growth, going
Further, Akamai's partnerships with the likes of Cisco and Qualcomm
will help the company to expand successfully in the cybersecurity
Moreover, Akamai's superior content delivery platform has been
selected by the likes of Apple due to its ability to provide
high-quality service at a much lower rate compared to its peers.
Additionally, the company's dominance in the web application
business is expected to be a significant growth catalyst, going
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, which will hurt margins in the rest of 2014.
Our proven model does not conclusively show that Akamai is likely
to beat earnings this quarter. That is because a stock needs to
have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 46 cents. Hence, the difference is of 0.00%.
Zacks Rank #3 (Hold):
Akamai's Zacks Rank #3 when combined with a 0.00% ESP makes
surprise prediction difficult.
We caution against stocks with Zacks #4 and #5 Ranks (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our model
shows they have the right combination of elements to post an
earnings beat this quarter:
Synaptics Inc. (
), Earnings ESP of +4.07% and a Zacks Rank #1 (Strong Buy).
Western Digital Corporation (
), Earnings ESP of +4.02% and a Zacks Rank #2 (Buy).
Iron Mountain Inc. (
), Earnings ESP of +12.82% and a Zacks Rank #2 (Buy).
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