Akamai Technologies ( AKAM - Free Report) is one of those companies that’s not necessarily a household name, but that virtually everyone interacts with on a daily basis without even being aware of it. Akamai’s “Intelligent Platform” is a distributed cloud computing network of over 240,000 servers worldwide which gathers real-time data on net traffic and congestion and uses complex proprietary algorithms to ensure the most efficient content delivery possible. An estimated 15-30% of all web traffic is routed through Akamai’s network. Akamai’s customers take advantage of this vast network to have content delivered from server locations that are geographically closet to the end user, ensuring the best performance and user experience possible. Akamai also provides advanced cloud security services. Akamai has been steadily growing revenue and earnings and has beat the Zacks Consensus Earnings Estimate in each of the past 4 quarters, including a strong Q1 one report in which management raised guidance for 2018. Q1 revenues were $669M, with $353M coming from the Web Division and $316M from the Media and Carrier division, increases of 16% and 6% respectively, over the year-ago period. Net earnings were $0.79/share beating estimates of $0.70 by 13%. The real bonus for investors was that the company raised guidance for both Q2 and FY2018. CEO Dr. Tom Leighton stated “We are pleased with the results of our first quarter performance, which featured continued outstanding growth in our security business, substantial improvement I our media business, marginal expansion and accelerated revenue growth overall.” Akamai is clearly firing on all cylinders. Revenues next quarter are expected to be in the range of $658M - $670M and earning between $0.79/share and $0.83/share. Full year earnings guidance is now $3.15/share to $3.25/share, up from previous guidance of $2.90 - $3.01/share. Akamai shares are up 17% in 2018, handily beating the Internet Services industry as a whole, which has declined 5%. Analysts have taken note of Akamai’s strong performance with upgrades in the past 30 days. The consensus estimate for 2018 now stands at $3.27/share. Akamai is a Zacks Rank #1 (Strong Buy). Investors would be well served to look past the big “brand names” of the internet and examine companies like Akamai, which provides the backbone of such a wide range of services in internet operations.
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