Another of Maguire’s favorites is Akamai (AKAM), whose shares he also rates a Buy. He raised his price target to $66 from $56, “as the company is increasingly well posed to capitalize on robust gorwth in mobile e-commerce and video.”
"Another of Maguire’s favorites is Akamai (AKAM), whose shares he also rates a Buy. He raised his price target to $66 from $56, “as the company is increasingly well posed to capitalize on robust gorwth in mobile e-commerce and video.”
Maguire uses the all-important buzz-jargon “big data” to encapsulte all the various forms of media — video, music, television, etc. — that the company moves across the Web:
Management has a near-term goal of 18% revenue growth over the next
three to five years, and with current forecasts modeling low-teens growth, there’s an inflection in the works. Since mid-2012, Akamai has pursued an aggressive sales-force expansion after several years of conservative hiring. The plan will increase total sales headcount by roughly 80% through the end of 2013, and with roughly five quarters for new hires to become productive, we are expecting the fruits of this expansion to manifest in 2H13. Moving big data across the cloud Akamai’s core competency is moving bits (media, images, software, games etc) across the public internet. The business benefits from periodic inflections in data traffic – the rise of YouTube in 2005-06, proliferation of HD Video in 2009-10. The current surge of streaming content, mobile and social applications is driving further growth in demand. An expanding product portfolio Akamai has a healthy pipeline of new services offerings that complement its existing Media Delivery and Web Performance and Security businesses. Security launched as an independent unit in 2012 with a range of anti-DDoS (distributed denial of service) related offerings. Late in 2012, the company announced deals with carriers AT&T and Orange to license its CDN software, and this segment is seeing strong momentum. Slated for 2014 are hybrid cloud offerings that will target location-based ecommerce opportunities.