What To Expect From Akamai Technologies’ Q4 Earnings

by Trefis Team
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Akamai Technologies (NASDAQ: AKAM) is scheduled to report its fourth quarter earnings on Tuesday, February 12. The company reported Q3 results that came in ahead of consensus expectations. In addition to continued strength in the company’s cloud security business, we expect updates on its blockchain venture with MUFG and additional traction arising from edge use cases.

We currently have a price estimate of $74 per share for Akamai Technologies, which is slightly higher than the current market price. Our interactive dashboard on Akamai Technologies’ Valuation outlines our forecasts and estimates for the company. You can modify any of the key drivers to visualize the impact of changes on its valuation.

Akamai’s Cloud Security business has been growing at over 30% y-o-y. Furthermore, the company’s distributed network of over 240K servers positions it uniquely in a world where edge computing appears to be taking over. In fact, excluding the declines from internet platform customers, and despite management’s focus on the cloud security business, even the CDN business has been growing.

Leveraging the company’s distributed network reach, Akamai – in association with MUFG – is also expected to launch a blockchain-based online payment network capable of processing up to 10 million transactions per second with a latency of 2 seconds. In addition to becoming a “blockchain-as-a-service” provider, Akamai has been on a path to improve its operating margins to 30% by 2020. The combination of these factors is likely to help the company deliver consensus-beating guidance going forward.

In the Q4 results, we will be listening in for the company’s progress around its expected blockchain launch in the first half of 2020, and also around traction / metrics of how edge has been helping the company’s cloud business grow. While we do not expect marked improvement in the internet platform business, any positive commentary could lead to a significant pop.

Do not agree with our forecast? Create your own price forecast for Akamai Technologies by changing the base inputs (blue dots) on our interactive dashboard.

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