Akamai (AKAM) earnings: is there much upside for the stock?

11:36 pm ET, 28 Oct 2018

Akamai Technologies, Inc. (AKAM) shares are trading at $61.97, down -2%. The company is announcing its quarterly earnings results on Monday after the market close. What's driving Akamai stock price? What's AKAM stock price forecast?

Akamai Technologies provides cloud services for delivering, optimizing, and securing content and business application over the internet. The stock has returned 17% in the past year.  Important to note is that the company agreed to restructure after pressure from the activist investor firm Elliot Management last December.

Investors are showing interest in the stock as the company’s cloud security solutions segment has solid long-term potential. On the other, some bearish investors feel that the stock is overvalued at the current price. Last quarter’s revenue grew 9.4% to $662.76 million and earnings per share came at 83 cents compared to 62 cents for the same period last year.

Third-quarter results will be released after market close on October 29, 2018.  Analysts expect the company to earn 83 cents per share on revenue of $664.17 million. The company beat analysts’ estimates in the previous four quarters.

What is the sentiment towards the AKAM stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending positive. 

Over the last month, Akamai Technologies, Inc. (AKAM) returned -13.14%.

Akamai Technologies, Inc. (AKAM) short share of float is 5.89%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

Akamai Technologies, Inc. (AKAM) average analyst price target ($82.70) is 29.54% above its current price ($63.84).

For the latest price and information on Akamai Technologies, Inc., please visit Finstead and search for "AKAM price" or "AKAM news".

Akamai Technologies, Inc. (AKAM) Stock Guide

Updated at: 10:38 am ET, 17 Sep 2020

Before we start: if you're looking for AKAM stock price, you can quickly find it out by visiting Finny and typing "AKAM quote". If you're looking for a quick scoop on AKAM stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "AKAM". You'll get all this info in one place. Or you can just type "AKAM news" to get the latest stock news.

Looking to buy or sell Akamai Technologies, Inc. (AKAM)? Interested in getting the full scoop on AKAM, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this AKAM stock guide, we'll address key questions about AKAM, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are AKAM earnings?
2. What is AKAM stock forecast (i.e., prediction)?
3. AKAM buy or sell? What is AKAM Finny Score?
4. What are the reasons to buy AKAM? Why should I buy AKAM stock?
5. What are the reasons to sell AKAM? Why should I sell AKAM stock?
6. What are AKAM key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are AKAM earnings?

AKAM trailing 12-month earnings per share (EPS) is $3.30.

Analyst Predictions

2. What is AKAM stock forecast (i.e., prediction)?

Based on AKAM analyst price targets, AKAM stock forecast is $124.65 (for a year from now). That means the average analyst price target for AKAM stock is $124.65. The prediction is based on 26 analyst estimates.

The low price target for AKAM is $105.00, while the high price target is $153.00.

AKAM analyst rating is Hold.

Analysis

3. AKAM buy or sell? What is AKAM Finny Score?

#{finnyScore:71}Our quantitative analysis shows 5 reasons to buy and 2 reasons to sell AKAM, resulting in Finny Score of 71.

4. What are the reasons to buy AKAM? Why should I buy AKAM stock?

Here are the reasons to buy AKAM stock:

  • Although we see threats due to CDN buildouts by large tech firms, Akamai has fended off dozens of CDN startups during the past decade, with none of them coming close to the scale or profitability of Akamai.
  • Cloud computing and Internet video will continue to explode, creating massive demand for those firms, like Akamai, that can deliver a high-quality experience.
  • Many telecom firms have been acquiring CDN and related technologies. Akamai is a solid acquisition candidate, given its strong intellectual property, widely deployed network, and sizable customer base.
  • AKAM quarterly revenue growth was 12.70%, higher than the industry and sector average revenue growth (1.11% and 0.89%, respectively). See AKAM revenue growth chart.
  • AKAM profitability is improving. The YoY profit margin change was 2.27 percentage points. See AKAM profitability chart.
  • AKAM PEG ratio (P/E adjusted for growth) is 2.03, which is low compared to its industry peers’ PEG ratios. See AKAM PEG chart.
  • AKAM average analyst price target ($124.65) is above its current price ($106.61). See AKAM price target chart.
  • AKAM cash to debt ratio is 0.51, higher than the average industry (0.16) and sector (0.17) cash to debt ratio. See AKAM cash to debt chart.

5. What are the reasons to sell AKAM? Why should I sell AKAM stock?

Let's look at the reasons to sell AKAM stock (i.e., the bear case):

  • Several technology giants, such as Amazon and Google, are developing CDN capabilities that could seriously threaten Akamai’s customer base in a few years.
  • Telecom carriers and cloud vendors could price CDN at discount while recouping profits on other value-added services, further pressuring Akamai’s pricing.
  • It's not clear that Akamai has technical superiority in delivering dynamic content that is personalized for each viewer. Similarly, several firms specialized in video streaming, such as Netflix and MLB’s BAM Tech, have domain expertise similar to Akamai.
  • AKAM short share of float is 7.04%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See AKAM short share of float chart.
  • AKAM short interest (days to cover the shorts) ratio is 6.77. The stock garners more short interest than the average industry, sector or S&P 500 stock. See AKAM short interest ratio chart.

Key Stats

6. What are AKAM key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for AKAM:

Metrics AKAM
Price $109.81
Average Price Target / Upside $124.65 / 13.51%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Software - Application
Sector Technology
Number of Employees 7,519
Market Cap $19.37B
Forward P/E Ratio 21.72
Price/Book Ratio 6.37
Revenue (TTM) $3.04B
YoY Quarterly Revenue Growth 12.70%
Profit Margin 17.82%

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