We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Akamai Technologies (AKAM) Q3 Earnings: What's in Store?
Read MoreHide Full Article
Akamai Technologies Inc. (AKAM - Free Report) is set to report third-quarter 2016 results on Oct 25. Last quarter, the company reported a negative earnings surprise of 6%. However, we note that Akamai has delivered an average positive earnings surprise of 4.14% over the trailing four quarters.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
For the third quarter, Akamai expects revenues in the range of $566 million to $578 million, which implies an almost 4% year-over-year growth at mid-point. Non-GAAP earnings are projected in the range of 59–62 cents per share, as compared with 53 cents reported in the year-ago quarter.
We believe Akamai will continue to benefit from the rising demand for cloud infrastructure solutions, security, mobile products and online video. The company’s strong presence in the web applications domain is a key catalyst.
Additionally, strategic acquisitions continue to expand the company’s product portfolio and strengthen its position in fast growing markets like Internet of Things (IoT). This will further drive top-line growth.
However, the setbacks in the company’s media delivery business can pose some concerns. In addition, the over-the-top (OTT) video market has been sluggish of late. Even though consumers continue to shift from traditional videos to OTT, the rate of conversion is lower than expected. This negative trend can hurt revenue growth in the quarter.
Earnings Whispers
Our proven model does not conclusively show that Akamai is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Akamai has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 48 cents.
Zacks Rank: Akamai carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:
SITO Mobile Ltd. has an earnings ESP of +100% and a Zacks Rank #1.
Veeco Instruments Inc. (VECO - Free Report) has an earnings ESP of +17.86% and a Zacks Rank #1.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Akamai Technologies (AKAM) Q3 Earnings: What's in Store?
Akamai Technologies Inc. (AKAM - Free Report) is set to report third-quarter 2016 results on Oct 25. Last quarter, the company reported a negative earnings surprise of 6%. However, we note that Akamai has delivered an average positive earnings surprise of 4.14% over the trailing four quarters.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
For the third quarter, Akamai expects revenues in the range of $566 million to $578 million, which implies an almost 4% year-over-year growth at mid-point. Non-GAAP earnings are projected in the range of 59–62 cents per share, as compared with 53 cents reported in the year-ago quarter.
We believe Akamai will continue to benefit from the rising demand for cloud infrastructure solutions, security, mobile products and online video. The company’s strong presence in the web applications domain is a key catalyst.
Additionally, strategic acquisitions continue to expand the company’s product portfolio and strengthen its position in fast growing markets like Internet of Things (IoT). This will further drive top-line growth.
AKAMAI TECH Price and EPS Surprise
AKAMAI TECH Price and EPS Surprise | AKAMAI TECH Quote
However, the setbacks in the company’s media delivery business can pose some concerns. In addition, the over-the-top (OTT) video market has been sluggish of late. Even though consumers continue to shift from traditional videos to OTT, the rate of conversion is lower than expected. This negative trend can hurt revenue growth in the quarter.
Earnings Whispers
Our proven model does not conclusively show that Akamai is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Akamai has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 48 cents.
Zacks Rank: Akamai carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:
SITO Mobile Ltd. has an earnings ESP of +100% and a Zacks Rank #1.
Vocera Communications Inc. has an earnings ESP of +10% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Veeco Instruments Inc. (VECO - Free Report) has an earnings ESP of +17.86% and a Zacks Rank #1.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>