Quick Look at Akamai Technologies (AKAM)

Now trading at a price of $78.12, Akamai Technologies has moved 0.9% so far today.

Akamai Technologies shares moved -35.1% over the last 52 weeks, with a high of $123.25 and a low of $70.65. During this time, the stock lagged the S&P 500 index by -26.0%. As of January 2022, the company's 50-day average price is $78.86. Akamai Technologies, Inc. provides cloud services for securing, delivering, and computing content, applications, and software over the internet in the United States and internationally. The large-cap Consumer Discretionary company has 9,800 full time employees and is based in Cambridge, MA. Akamai Technologies has not offered any dividends in the last year.

The Company Has a Steady Stream of Positive Cash Flows:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $2,894 $3,198 $3,461 $3,617
Revenue Growth n/a 10.52% 8.23% 4.49%
Gross Margins 65.9% 64.6% 63.3% 61.7%
Gross Margins Growth n/a -1.97% -2.01% -2.53%
Operating Margins 20.0% 21.9% 23.3% 19.6%
Operating Margins Growth n/a 9.5% 6.39% -15.88%
Net Margins 16.52% 17.42% 18.83% 14.48%
Net Margins Growth n/a 5.45% 8.09% -23.1%
Earnings Per Share $2.9 $3.37 $3.93 $3.24
EPS Growth n/a 16.21% 16.62% -17.56%
Diluted Shares (MM) 165 165 166 156
Free Cash Flow (MM) $496 $483 $859 $816
FCF Growth n/a -2.64% 77.87% -5.0%
Capital Expenditures (MM) -$562 -$732 -$545 -$458
Net Debt / EBITDA 1.38 1.29 1.05 1.35

Akamai Technologies Is Currently Fairly Valued:

Compared to the Consumer Discretionary sector's average of 22.33, Akamai Technologies has a trailing twelve month P/E ratio of 24.1 and, according to its EPS guidance of 6.02, an expected P/E ratio of 13.0. Akamai Technologies's PEG ratio is 1.21 based on its 20.0% compound average growth rate of historical and projected earnings per share. This implies that the company's shares are fairly valued.

Furthermore, Akamai Technologies is likely undervalued in terms of its equity because its P/B ratio is 2.8 compared to its sector average of 3.12. The company's shares are currently trading 70.2% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 3.36 * 27.862) = $45.9

Akamai Technologies's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.

Akamai Technologies Is the Subject of Mixed Market Indicators:

16 analysts are following Akamai Technologies and have set target prices ranging from $75.0 to $110.0 per share. On average, they have given the company a rating of hold. At the current price of $78.12, AKAM is trading -16.05% away from its average analyst target price of $93.05 per share, implying an analyst consensus of some upside potential for the stock.

The company has an above average percentage of its shares sold short since 8.1% of the company's shares are tied to short positions. Institutions own 95.9% of Akamai Technologies's shares, while the insider ownership rate stands at 1.75%. The biggest shareholder is the Vanguard Group, Inc. with a 11% stake in the company worth approximately $1,402,428,256.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.