To The Moon

$Akamai(AKAM)$ is scheduled to announce Q4 earnings results on 13 Feb 2024 after market close. The consensus EPS Estimate is $1.61 (+17.5% Y/Y) and the consensus Revenue Estimate is $999.71M (+7.8% Y/Y).

If we look at the software development segment, Akamai's peers who have already reported Q4 earnings results. We should have a rough gauge of how Akamai should fare, Cloudflare delivered top-line growth of 32% year on year, beating analyst estimates by 2.7% and F5 reported revenue decline of 1.1% year on year, exceeding estimates by 1.1%. Cloudflare traded up 20.2% on the results, and F5 was up 10.6%.

Both of these peers traded upside after the results. I think we should look at what Akamai has offered to clients and investors during the quarter. Akamai announced that it has introduced its Client-Side Protection & Compliance product in the Microsoft Azure Marketplace. This new solution help enterprise to upsize their cybersecurity defence and also enables organizations to obtain PCI DSS v4.0 compliance with ease and provides businesses the assurance that end-user payment card data is safeguarded.

Akamai move to made available on Azure marketplace will likely to have a favorable impact on fourth-quarter results. In Q4 2023, Akamai also collaborated with GlobalLogic Inc., a Hitachi Group company, to develop a wide range of enterprise technology solutions. The strategic partnership aims to offer system integration, managed services and professional services across various industries, including media & entertainment, telecommunications, financial services, automotive and e-commerce.

I would say Akamai have done quite a fair bit to cement its position in this segment and also to prepare itself for future demand. I would like to share why Akamai would perform well, as we have seen $Beamr Imaging(BMR)$ stock price soar after they decide to adopt the Nvidia accelerated video standard.

Technical is providing an uptrend for Akamai, which I believe this company would benefit from the vast adoption of web based and mobile based application.

Why Video Performs Better On Social Media

Video is processed in our brains 60,000 times faster than text. It immediately ignites emotion and personal connection; enticing viewers to seek more information. It is no wonder that businesses are choosing to use it to their advantage. After all, vision is our most dominant sense.

Cable TV was once considered the leading source of video. In the last 30 days, there has been more video content uploaded to social media than the major U.S. television networks have created in 30 years. Media exposure is no longer on television or newscasts. It is in our pockets, on our desks, at work, at home, all these are delivered through video on Instagram, Snapchat, YouTube, and Facebook.

This is where Akamai solution would have very much potential to grow, as they are able to secure content and also ensure delivery of video content steadily.

Akamai (AKAM) Last Reported Earnings

AKAM last reported earnings on 07 NOv 2023 after the market close (AMC). AKAM shares gained +1.6% the day following the earnings announcement to close at 110.56. Following its earnings release, 98 days ago, AKAM stock has drifted +15.9% higher.

From the time it announced earnings, AKAM traded in a range between 109.16 and 129.17. The last price (128.15) is closer to the higher end of range.

Estimated implied straddle for upcoming earnings is 6.3%. I am expecting to see at least 2% upside from how the implied straddle have played out over the year.

Akamai (AKAM) Strong Growth Potential From GuruFocus

As given by GF analysis, Akamai have a very high score for 2024, with a very strong growth indication. And it is also unusual to see that profitability is also high on the scale, as when company is going for strong growth, cost would be a factor, especially for a company like Akamai.

I think something to look out in the earning report would be its financial health, though this stock have a pretty good momentum.

Summary

Akamai is worth looking into, as most of the hosted sites or applications, are using this solution. Their comprehensive solutions make deployment easier and cut down a lot on the time spend.

This would be even more important when AI really move into a client-server side, cybersecurity have always been a concern, and I think Akamai address that pretty well.

Appreciate if you could share your thoughts in the comment section whether you think Akamai would be able to surprise us with a much better-than-expected earnings?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.