2 Cybersecurity Stocks to Buy in a Growing Market

These stocks are set to gain in a booming tech sector

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2 Cybersecurity Stocks to Buy in a Growing Market

Akamai (AKAM) operates at the intersection of content delivery and network security, and has roughly 135,000 servers across the globe. These servers help its customers – including virtually all of the largest media and video-intense companies in the world like Yahoo, Facebook and Netflix – bring data faster to the ultimate user (that means people like you and me, who are busy downloading videos and photos).

The company says its servers are located on what might be termed the “edge” of the Internet, which in other words means that the servers are located physically close to end users. Because of that close proximity, content gets delivered faster. Management has claimed that as much as 30% of global Internet traffic is routed and cached across its servers. Operating across five product lines (Aqua, Sola, Kona, Aura and Terra), Akamai enables content delivery to sites, and also helps companies operate with cloud-based programs and streaming video (live and archived). Each of those “buckets” of revenues corresponds to a different customer base: Terra, for example, helps businesses connect effectively with their customers and supply chains; Kona focuses on cloud computing and security.

Since AKAM servers sit on the edge of the network and thus outside of corporate firewalls that are installed on premise or in the cloud, the Kona segment offers what can be thought of as a “first line” of defense against cyber attacks. Akamai can help deflect attacks before they ever make it to the corporate firewall.

This is a defensible niche for the company, given the size and scale of its server footprint and key customer base (comprised of many large companies, though no single customer makes up more than 10% of total revenues). That’s an attractive quality alongside a heavy focus in the fast-growing media segment and continued attention on cybersecurity.

At the moment, the Street expects Akamai to see 12% EPS growth alongside continued investment in the business as the company boosts its revenues 18% year-over-year to $1.8 billion in 2014. But that bottom line growth should reaccelerate into 2015 to around 18% or $2.63 a share. Given the media exposure, security presence and reach Akamai has, that estimate could be boosted considerably as we make our way through 2014.

 

 

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Article printed from InvestorPlace Media, http://investorplace.com/2014/04/cybersecurity-tech-scokc-akam-ftnt-amzn-twtr-stocks-to-buy/.

©2014 InvestorPlace Media, LLC

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