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Will Top-line Expansion Boost Akamai (AKAM) Q2 Earnings?
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Akamai Technologies, Inc. (AKAM - Free Report) is scheduled to release its second-quarter 2023 results on Aug 8, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 6.06%. It pulled off a trailing four-quarter earnings surprise of 4.86%, on average.
The company is expected to report higher revenues year over year, backed by healthy demand for security and cloud computing services. The strong emphasis on portfolio expansion through a combined approach of innovation and acquisition is a tailwind.
Factors at Play
In the second quarter, Akamai launched an enhanced security service with new premium features to strengthen protection against evolving cyber threats. The updated version will include greater assistance from Akamai experts, including technical advisory hours with engagement managers and support delivery managers, along with off-hours configuration assistance and quarterly customer business assessments. Premium offerings include better monitoring from Akamai’s Security Operations Control Center (SOCC), which allows rapid action from SOCC experts in case of a security breach. This is likely to have improved the company’s second-quarter earnings prospects.
In the quarter-under-review, Akamai announced the acquisition of Neosec, an API detection and response platform based on data and behavioral analytics. Neosec's API security solution is likely to complement Akamai's market-leading application and API security portfolio and extend the latter’s visibility into the rapidly growing API threat landscape. The combined API solution portfolio is expected to put the company at the forefront of a critical emerging category of API security and augment its market position. This initiative is expected to have strengthened Akamai’s portfolio, accelerated commercial expansion and supported the top line.
During the second quarter, Akamai announced the launch of the Prolexic Network Cloud Firewall, an advanced feature that empowers customers to define and manage their own access control lists. This enhancement offers greater flexibility in safeguarding their network edge. The company also introduced Brand Protector, an innovative solution designed to identify and disrupt phishing websites, fake stores and instances of brand impersonations. These initiatives are likely to have improved its top-line performance.
Our estimate for revenues from the security segment is pegged at $426.2 million, suggesting 12% year-over-year growth. Our revenue estimate for the compute vertical is pegged at $127.6 million, indicating growth from $106 million reported in the prior-year quarter. Revenues from the delivery segment are projected at $374.5 million.
For the second quarter of 2023, the Zacks Consensus Estimate for revenues is pegged at $932 million, indicating year-over-year growth from $903 million. The consensus estimate for adjusted earnings per share is pegged at $1.41, suggesting growth from $1.35 reported a year ago.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Akamai this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Tetra Tech (TTEK - Free Report) has an Earnings ESP of +20.00% and carries a Zacks Rank of 3. The company is set to report its quarterly numbers on Aug 9.
On Holding (ONON - Free Report) has an Earnings ESP of +5.00% and sports a Zacks Rank of 1. The company is set to report its quarterly numbers on Aug 15.
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Will Top-line Expansion Boost Akamai (AKAM) Q2 Earnings?
Akamai Technologies, Inc. (AKAM - Free Report) is scheduled to release its second-quarter 2023 results on Aug 8, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 6.06%. It pulled off a trailing four-quarter earnings surprise of 4.86%, on average.
The company is expected to report higher revenues year over year, backed by healthy demand for security and cloud computing services. The strong emphasis on portfolio expansion through a combined approach of innovation and acquisition is a tailwind.
Factors at Play
In the second quarter, Akamai launched an enhanced security service with new premium features to strengthen protection against evolving cyber threats. The updated version will include greater assistance from Akamai experts, including technical advisory hours with engagement managers and support delivery managers, along with off-hours configuration assistance and quarterly customer business assessments. Premium offerings include better monitoring from Akamai’s Security Operations Control Center (SOCC), which allows rapid action from SOCC experts in case of a security breach. This is likely to have improved the company’s second-quarter earnings prospects.
In the quarter-under-review, Akamai announced the acquisition of Neosec, an API detection and response platform based on data and behavioral analytics. Neosec's API security solution is likely to complement Akamai's market-leading application and API security portfolio and extend the latter’s visibility into the rapidly growing API threat landscape. The combined API solution portfolio is expected to put the company at the forefront of a critical emerging category of API security and augment its market position. This initiative is expected to have strengthened Akamai’s portfolio, accelerated commercial expansion and supported the top line.
During the second quarter, Akamai announced the launch of the Prolexic Network Cloud Firewall, an advanced feature that empowers customers to define and manage their own access control lists. This enhancement offers greater flexibility in safeguarding their network edge. The company also introduced Brand Protector, an innovative solution designed to identify and disrupt phishing websites, fake stores and instances of brand impersonations. These initiatives are likely to have improved its top-line performance.
Our estimate for revenues from the security segment is pegged at $426.2 million, suggesting 12% year-over-year growth. Our revenue estimate for the compute vertical is pegged at $127.6 million, indicating growth from $106 million reported in the prior-year quarter. Revenues from the delivery segment are projected at $374.5 million.
For the second quarter of 2023, the Zacks Consensus Estimate for revenues is pegged at $932 million, indicating year-over-year growth from $903 million. The consensus estimate for adjusted earnings per share is pegged at $1.41, suggesting growth from $1.35 reported a year ago.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Akamai this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Akamai Technologies, Inc. Price and EPS Surprise
Akamai Technologies, Inc. price-eps-surprise | Akamai Technologies, Inc. Quote
Zacks Rank: Akamai has a Zacks Rank #2 (Buy).
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Legend Biotech (LEGN - Free Report) is set to release its quarterly numbers on Aug 15. It has an Earnings ESP of +8.26% and carries a Zacks Rank #2. You can the complete list of today’s Zacks #1 Rank stocks here.
Tetra Tech (TTEK - Free Report) has an Earnings ESP of +20.00% and carries a Zacks Rank of 3. The company is set to report its quarterly numbers on Aug 9.
On Holding (ONON - Free Report) has an Earnings ESP of +5.00% and sports a Zacks Rank of 1. The company is set to report its quarterly numbers on Aug 15.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.