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 (AKAM) Closes Linode Buyout to Boost Cloud Competencies
Read MoreHide Full Article
Akamai Technologies, Inc. (AKAM - Free Report) recently announced that it has completed the buyout of Linode for $900 million. The acquisition of this leading Infrastructure-as-a-service platform provider will augment Akamai’s leading position in the market and will likely leapfrog it as the world’s most distributed compute platform, from cloud to edge.
The deal inked in February this year aims to combine Linode’s developer-friendly cloud computing capabilities with Akamai’s market-leading edge platform and security services. With more than two decades of rich industry experience, Linode operates as one of the world’s largest independent open cloud providers, with 11 global data centers serving nearly a million customers and businesses around the globe. Its flagship products are cloud-hosting services with multiple packages at different price points that enable users to easily manage and scale infrastructure facilities for low latency secure network.
The transaction, structured as an asset purchase, is likely to help Akamai achieve cash income tax savings over the next 15 years with an estimated net present value of approximately $120 million. The buyout is anticipated to be accretive to non-GAAP earnings in fiscal 2022 to the tune of 5-6 cents on a per share basis, generating about $100 million incremental revenues.
We believe that the increasing adoption of cloud computing technologies will be a major growth driver for Akamai. The company’s cloud optimization solutions help organizations improve performance, increase availability and enhance the security of applications and key web assets delivered from data centers to the end user. Since a large portion of the revenues is recurring in nature, the company is expected to boost its sales force and investments by developing new products to achieve its long-term annual revenue target of $5 billion.
Cybersecurity is an area that holds a lot of promise for Akamai. With the rapid adoption of cloud computing, security has become a major concern for enterprises. Hackers are using new and sophisticated techniques to take advantage of the security loopholes of the cloud. Large enterprises are expected to increase their security budgets to efficiently address security concerns and instill confidence in cloud computing. We believe that the growing demand for Akamai’s security solutions will translate into significant growth opportunities over the long term. The company’s security offerings are poised to gain from higher demand for data computing at the edge, triggered by rapid deployment of 5G and IoT devices proliferation.
The stock has gained 16.3% over the past year compared with the industry’s rally of 11.2%.
trivago delivered an earnings surprise of 145.8%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 100% since March 2021. trivago enables travelers to make informed decisions by personalizing their search for accommodations and providing them with access to relevant information and prices.
Sohu.com Limited (SOHU - Free Report) , carrying a Zacks Rank #2 (Buy), is another key pick. It delivered an earnings surprise of 232%, on average, in the trailing four quarters.
Sohu continues to increase its investments in online video. The company is focusing on self-developed content and other short-form video program categories, which are much less expensive than TV content. We believe that Sohu will continue to benefit from the growth potential of the Chinese online gaming market.
Marchex, Inc. (MCHX - Free Report) , carrying a Zacks Rank #2, is also a key pick. It has a long-term earnings growth expectation of 15% and delivered an earnings surprise of 58.3%, on average, in the trailing four quarters.
Earnings estimates for the current year for Marchex have moved up 45.5% since March 2021. Its multichannel voice and text capabilities are commendable. Marchex is one of the trusted conversation intelligence partners for diverse companies in critical industries.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Akamai (AKAM) Closes Linode Buyout to Boost Cloud Competencies
Akamai Technologies, Inc. (AKAM - Free Report) recently announced that it has completed the buyout of Linode for $900 million. The acquisition of this leading Infrastructure-as-a-service platform provider will augment Akamai’s leading position in the market and will likely leapfrog it as the world’s most distributed compute platform, from cloud to edge.
The deal inked in February this year aims to combine Linode’s developer-friendly cloud computing capabilities with Akamai’s market-leading edge platform and security services. With more than two decades of rich industry experience, Linode operates as one of the world’s largest independent open cloud providers, with 11 global data centers serving nearly a million customers and businesses around the globe. Its flagship products are cloud-hosting services with multiple packages at different price points that enable users to easily manage and scale infrastructure facilities for low latency secure network.
The transaction, structured as an asset purchase, is likely to help Akamai achieve cash income tax savings over the next 15 years with an estimated net present value of approximately $120 million. The buyout is anticipated to be accretive to non-GAAP earnings in fiscal 2022 to the tune of 5-6 cents on a per share basis, generating about $100 million incremental revenues.
We believe that the increasing adoption of cloud computing technologies will be a major growth driver for Akamai. The company’s cloud optimization solutions help organizations improve performance, increase availability and enhance the security of applications and key web assets delivered from data centers to the end user. Since a large portion of the revenues is recurring in nature, the company is expected to boost its sales force and investments by developing new products to achieve its long-term annual revenue target of $5 billion.
Cybersecurity is an area that holds a lot of promise for Akamai. With the rapid adoption of cloud computing, security has become a major concern for enterprises. Hackers are using new and sophisticated techniques to take advantage of the security loopholes of the cloud. Large enterprises are expected to increase their security budgets to efficiently address security concerns and instill confidence in cloud computing. We believe that the growing demand for Akamai’s security solutions will translate into significant growth opportunities over the long term. The company’s security offerings are poised to gain from higher demand for data computing at the edge, triggered by rapid deployment of 5G and IoT devices proliferation.
The stock has gained 16.3% over the past year compared with the industry’s rally of 11.2%.
Image Source: Zacks Investment Research
Akamai currently has a Zacks Rank #3 (Hold).
trivago N.V. (TRVG - Free Report) , sporting a Zacks Rank #1 (Strong Buy), is a solid pick for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
trivago delivered an earnings surprise of 145.8%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 100% since March 2021. trivago enables travelers to make informed decisions by personalizing their search for accommodations and providing them with access to relevant information and prices.
Sohu.com Limited (SOHU - Free Report) , carrying a Zacks Rank #2 (Buy), is another key pick. It delivered an earnings surprise of 232%, on average, in the trailing four quarters.
Sohu continues to increase its investments in online video. The company is focusing on self-developed content and other short-form video program categories, which are much less expensive than TV content. We believe that Sohu will continue to benefit from the growth potential of the Chinese online gaming market.
Marchex, Inc. (MCHX - Free Report) , carrying a Zacks Rank #2, is also a key pick. It has a long-term earnings growth expectation of 15% and delivered an earnings surprise of 58.3%, on average, in the trailing four quarters.
Earnings estimates for the current year for Marchex have moved up 45.5% since March 2021. Its multichannel voice and text capabilities are commendable. Marchex is one of the trusted conversation intelligence partners for diverse companies in critical industries.