AKAMAI TECHNOLOGIES INC (AKAM) Stock Fundamental Analysis
NASDAQ:AKAM - Nasdaq - US00971T1016 - Common Stock - Currency: USD
Overall AKAM gets a fundamental rating of 5 out of 10. We evaluated AKAM against 81 industry peers in the IT Services industry. Both the profitability and the financial health of AKAM get a neutral evaluation. Nothing too spectacular is happening here. A decent growth rate in combination with a cheap valuation! Better keep an eye on AKAM.
1. Profitability
1.1 Basic Checks
AKAM had positive earnings in the past year.
AKAM had a positive operating cash flow in the past year.
In the past 5 years AKAM has always been profitable.
In the past 5 years AKAM always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 4.87%, AKAM is doing good in the industry, outperforming 65.43% of the companies in the same industry.
Looking at the Return On Equity, with a value of 10.35%, AKAM is in the better half of the industry, outperforming 65.43% of the companies in the same industry.
AKAM has a better Return On Invested Capital (7.20%) than 65.43% of its industry peers.
AKAM had an Average Return On Invested Capital over the past 3 years of 7.45%. This is below the industry average of 10.72%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.87% | ||
| ROE | 10.35% | ||
| ROIC | 7.2% |
ROA(3y)5.57%
ROA(5y)6.38%
ROE(3y)11.42%
ROE(5y)12.35%
ROIC(3y)7.45%
ROIC(5y)8.08%
1.3 Margins
AKAM's Profit Margin of 12.65% is amongst the best of the industry. AKAM outperforms 88.89% of its industry peers.
In the last couple of years the Profit Margin of AKAM has declined.
With an excellent Operating Margin value of 17.61%, AKAM belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
In the last couple of years the Operating Margin of AKAM has declined.
Looking at the Gross Margin, with a value of 59.39%, AKAM is in the better half of the industry, outperforming 79.01% of the companies in the same industry.
AKAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.61% | ||
| PM (TTM) | 12.65% | ||
| GM | 59.39% |
OM growth 3Y-8.94%
OM growth 5Y-2.49%
PM growth 3Y-12.41%
PM growth 5Y-5.2%
GM growth 3Y-2.12%
GM growth 5Y-2.05%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AKAM is destroying value.
AKAM has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, AKAM has less shares outstanding
The debt/assets ratio for AKAM has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.24 indicates that AKAM is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.24, AKAM is in line with its industry, outperforming 46.91% of the companies in the same industry.
AKAM has a debt to FCF ratio of 5.06. This is a neutral value as AKAM would need 5.06 years to pay back of all of its debts.
AKAM's Debt to FCF ratio of 5.06 is in line compared to the rest of the industry. AKAM outperforms 53.09% of its industry peers.
AKAM has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.
AKAM has a Debt to Equity ratio (0.49) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 5.06 | ||
| Altman-Z | 2.24 |
ROIC/WACC0.87
WACC8.27%
2.3 Liquidity
AKAM has a Current Ratio of 1.23. This is a normal value and indicates that AKAM is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.23, AKAM is doing worse than 66.67% of the companies in the same industry.
AKAM has a Quick Ratio of 1.23. This is a normal value and indicates that AKAM is financially healthy and should not expect problems in meeting its short term obligations.
AKAM has a Quick ratio of 1.23. This is in the lower half of the industry: AKAM underperforms 65.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.23 | ||
| Quick Ratio | 1.23 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.19% over the past year.
AKAM shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.53% yearly.
AKAM shows a small growth in Revenue. In the last year, the Revenue has grown by 4.70%.
AKAM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.64% yearly.
EPS 1Y (TTM)4.19%
EPS 3Y4.07%
EPS 5Y7.53%
EPS Q2Q%-1.78%
Revenue 1Y (TTM)4.7%
Revenue growth 3Y4.86%
Revenue growth 5Y6.64%
Sales Q2Q%2.5%
3.2 Future
AKAM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.78% yearly.
Based on estimates for the next years, AKAM will show a small growth in Revenue. The Revenue will grow by 7.48% on average per year.
EPS Next Y-1.48%
EPS Next 2Y3.03%
EPS Next 3Y6.71%
EPS Next 5Y9.78%
Revenue Next Year3.27%
Revenue Next 2Y4.49%
Revenue Next 3Y6.19%
Revenue Next 5Y7.48%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
AKAM is valuated reasonably with a Price/Earnings ratio of 11.35.
Based on the Price/Earnings ratio, AKAM is valued cheaper than 87.65% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. AKAM is valued rather cheaply when compared to this.
AKAM is valuated reasonably with a Price/Forward Earnings ratio of 11.52.
86.42% of the companies in the same industry are more expensive than AKAM, based on the Price/Forward Earnings ratio.
AKAM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.35 | ||
| Fwd PE | 11.52 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AKAM is valued cheaply inside the industry as 83.95% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AKAM indicates a rather cheap valuation: AKAM is cheaper than 85.19% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.31 | ||
| EV/EBITDA | 8.59 |
4.3 Compensation for Growth
AKAM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.51
EPS Next 2Y3.03%
EPS Next 3Y6.71%
5. Dividend
5.1 Amount
AKAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
73.46
-0.35 (-0.47%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners98.09%
Inst Owner Change0.01%
Ins Owners1.86%
Ins Owner Change6.49%
Market Cap10.73B
Analysts76
Price Target108.99 (48.37%)
Short Float %6%
Short Ratio3.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.91%
Min EPS beat(2)-1.88%
Max EPS beat(2)7.7%
EPS beat(4)3
Avg EPS beat(4)1.77%
Min EPS beat(4)-1.88%
Max EPS beat(4)7.7%
EPS beat(8)7
Avg EPS beat(8)3.19%
EPS beat(12)10
Avg EPS beat(12)2.45%
EPS beat(16)14
Avg EPS beat(16)2.45%
Revenue beat(2)0
Avg Revenue beat(2)-1.48%
Min Revenue beat(2)-1.55%
Max Revenue beat(2)-1.41%
Revenue beat(4)0
Avg Revenue beat(4)-1.69%
Min Revenue beat(4)-2.09%
Max Revenue beat(4)-1.41%
Revenue beat(8)1
Avg Revenue beat(8)-1.43%
Revenue beat(12)2
Avg Revenue beat(12)-1.29%
Revenue beat(16)2
Avg Revenue beat(16)-1.21%
PT rev (1m)-1.56%
PT rev (3m)-7.51%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-4.2%
EPS NY rev (1m)-8.43%
EPS NY rev (3m)-7.78%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.62%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)-3.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.35 | ||
| Fwd PE | 11.52 | ||
| P/S | 2.69 | ||
| P/FCF | 15.31 | ||
| P/OCF | 7.07 | ||
| P/B | 2.2 | ||
| P/tB | 10.74 | ||
| EV/EBITDA | 8.59 |
EPS(TTM)6.47
EY8.81%
EPS(NY)6.37
Fwd EY8.68%
FCF(TTM)4.8
FCFY6.53%
OCF(TTM)10.4
OCFY14.15%
SpS27.32
BVpS33.39
TBVpS6.84
PEG (NY)N/A
PEG (5Y)1.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.87% | ||
| ROE | 10.35% | ||
| ROCE | 8.49% | ||
| ROIC | 7.2% | ||
| ROICexc | 8.93% | ||
| ROICexgc | 21.28% | ||
| OM | 17.61% | ||
| PM (TTM) | 12.65% | ||
| GM | 59.39% | ||
| FCFM | 17.57% |
ROA(3y)5.57%
ROA(5y)6.38%
ROE(3y)11.42%
ROE(5y)12.35%
ROIC(3y)7.45%
ROIC(5y)8.08%
ROICexc(3y)8.74%
ROICexc(5y)9.5%
ROICexgc(3y)17.88%
ROICexgc(5y)17.4%
ROCE(3y)8.78%
ROCE(5y)9.53%
ROICexcg growth 3Y5.69%
ROICexcg growth 5Y5.39%
ROICexc growth 3Y-6.51%
ROICexc growth 5Y-2.76%
OM growth 3Y-8.94%
OM growth 5Y-2.49%
PM growth 3Y-12.41%
PM growth 5Y-5.2%
GM growth 3Y-2.12%
GM growth 5Y-2.05%
F-Score5
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 5.06 | ||
| Debt/EBITDA | 1.77 | ||
| Cap/Depr | 126.17% | ||
| Cap/Sales | 20.5% | ||
| Interest Coverage | 34.41 | ||
| Cash Conversion | 112.44% | ||
| Profit Quality | 138.85% | ||
| Current Ratio | 1.23 | ||
| Quick Ratio | 1.23 | ||
| Altman-Z | 2.24 |
F-Score5
WACC8.27%
ROIC/WACC0.87
Cap/Depr(3y)117.53%
Cap/Depr(5y)122.44%
Cap/Sales(3y)18.5%
Cap/Sales(5y)19.05%
Profit Quality(3y)128.52%
Profit Quality(5y)119.53%
High Growth Momentum
Growth
EPS 1Y (TTM)4.19%
EPS 3Y4.07%
EPS 5Y7.53%
EPS Q2Q%-1.78%
EPS Next Y-1.48%
EPS Next 2Y3.03%
EPS Next 3Y6.71%
EPS Next 5Y9.78%
Revenue 1Y (TTM)4.7%
Revenue growth 3Y4.86%
Revenue growth 5Y6.64%
Sales Q2Q%2.5%
Revenue Next Year3.27%
Revenue Next 2Y4.49%
Revenue Next 3Y6.19%
Revenue Next 5Y7.48%
EBIT growth 1Y-7.25%
EBIT growth 3Y-4.52%
EBIT growth 5Y3.99%
EBIT Next Year47.73%
EBIT Next 3Y19.38%
EBIT Next 5Y17.72%
FCF growth 1Y40.94%
FCF growth 3Y-6.56%
FCF growth 5Y7.16%
OCF growth 1Y12.66%
OCF growth 3Y2.65%
OCF growth 5Y7.5%