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. AKAM has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year AKAM was profitable.
AKAM had a positive operating cash flow in the past year.
AKAM had positive earnings in each of the past 5 years.
In the past 5 years AKAM always reported a positive cash flow from operatings.
1.2 Ratios
AKAM has a Return On Assets of 4.53%. This is in the better half of the industry: AKAM outperforms 64.20% of its industry peers.
The Return On Equity of AKAM (9.87%) is better than 62.96% of its industry peers.
AKAM has a Return On Invested Capital of 7.35%. This is in the better half of the industry: AKAM outperforms 64.20% of its industry peers.
AKAM had an Average Return On Invested Capital over the past 3 years of 7.45%. This is significantly below the industry average of 21.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.53% | ||
| ROE | 9.87% | ||
| ROIC | 7.35% |
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 11.26% is amongst the best of the industry. AKAM outperforms 80.25% of its industry peers.
AKAM's Profit Margin has declined in the last couple of years.
AKAM has a better Operating Margin (17.16%) than 91.36% of its industry peers.
In the last couple of years the Operating Margin of AKAM has declined.
Looking at the Gross Margin, with a value of 59.07%, AKAM is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
In the last couple of years the Gross Margin of AKAM has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.16% | ||
| PM (TTM) | 11.26% | ||
| GM | 59.07% |
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
AKAM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for AKAM has been reduced compared to 1 year ago.
AKAM has less shares outstanding than it did 5 years ago.
AKAM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.40 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 2.40, AKAM is in line with its industry, outperforming 44.44% of the companies in the same industry.
AKAM has a debt to FCF ratio of 6.47. This is a slightly negative value and a sign of low solvency as AKAM would need 6.47 years to pay back of all of its debts.
AKAM has a Debt to FCF ratio of 6.47. This is comparable to the rest of the industry: AKAM outperforms 49.38% of its industry peers.
AKAM has a Debt/Equity ratio of 0.52. This is a neutral value indicating AKAM is somewhat dependend on debt financing.
The Debt to Equity ratio of AKAM (0.52) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 6.47 | ||
| Altman-Z | 2.4 |
ROIC/WACC0.9
WACC8.18%
2.3 Liquidity
AKAM has a Current Ratio of 1.18. This is a normal value and indicates that AKAM is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of AKAM (1.18) is worse than 69.14% of its industry peers.
A Quick Ratio of 1.18 indicates that AKAM should not have too much problems paying its short term obligations.
AKAM has a Quick ratio of 1.18. This is in the lower half of the industry: AKAM underperforms 67.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
AKAM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.24%.
AKAM shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.53% yearly.
Looking at the last year, AKAM shows a small growth in Revenue. The Revenue has grown by 3.51% in the last year.
The Revenue has been growing slightly by 6.64% on average over the past years.
EPS 1Y (TTM)1.24%
EPS 3Y4.07%
EPS 5Y7.53%
EPS Q2Q%3.66%
Revenue 1Y (TTM)3.51%
Revenue growth 3Y4.86%
Revenue growth 5Y6.64%
Sales Q2Q%2.85%
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 8.05% yearly.
AKAM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.52% yearly.
EPS Next Y-0.52%
EPS Next 2Y2.66%
EPS Next 3Y5.11%
EPS Next 5Y8.05%
Revenue Next Year3.64%
Revenue Next 2Y4.5%
Revenue Next 3Y5.43%
Revenue Next 5Y6.52%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 12.19 indicates a correct valuation of AKAM.
Based on the Price/Earnings ratio, AKAM is valued cheaper than 88.89% of the companies in the same industry.
AKAM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
The Price/Forward Earnings ratio is 11.68, which indicates a very decent valuation of AKAM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AKAM indicates a rather cheap valuation: AKAM is cheaper than 86.42% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.70. AKAM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.19 | ||
| Fwd PE | 11.68 |
4.2 Price Multiples
83.95% of the companies in the same industry are more expensive than AKAM, based on the Enterprise Value to EBITDA ratio.
AKAM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AKAM is cheaper than 65.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.23 | ||
| EV/EBITDA | 10.06 |
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)1.62
EPS Next 2Y2.66%
EPS Next 3Y5.11%
5. Dividend
5.1 Amount
AKAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
79.61
-0.15 (-0.19%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.3%
Inst Owner Change-4.75%
Ins Owners1.99%
Ins Owner Change7.09%
Market Cap11.64B
Analysts76
Price Target104.5 (31.26%)
Short Float %6.51%
Short Ratio3.57
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)2
Avg EPS beat(2)6.95%
Min EPS beat(2)6.21%
Max EPS beat(2)7.7%
EPS beat(4)3
Avg EPS beat(4)3.28%
Min EPS beat(4)-1.88%
Max EPS beat(4)7.7%
EPS beat(8)7
Avg EPS beat(8)3.47%
EPS beat(12)11
Avg EPS beat(12)3.3%
EPS beat(16)14
Avg EPS beat(16)2.6%
Revenue beat(2)0
Avg Revenue beat(2)-1.54%
Min Revenue beat(2)-1.55%
Max Revenue beat(2)-1.54%
Revenue beat(4)0
Avg Revenue beat(4)-1.56%
Min Revenue beat(4)-1.73%
Max Revenue beat(4)-1.41%
Revenue beat(8)1
Avg Revenue beat(8)-1.44%
Revenue beat(12)2
Avg Revenue beat(12)-1.26%
Revenue beat(16)2
Avg Revenue beat(16)-1.28%
PT rev (1m)-1.4%
PT rev (3m)-5.61%
EPS NQ rev (1m)-0.3%
EPS NQ rev (3m)2.22%
EPS NY rev (1m)0.22%
EPS NY rev (3m)0.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.87%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.19 | ||
| Fwd PE | 11.68 | ||
| P/S | 2.9 | ||
| P/FCF | 21.23 | ||
| P/OCF | 8.21 | ||
| P/B | 2.54 | ||
| P/tB | 16.02 | ||
| EV/EBITDA | 10.06 |
EPS(TTM)6.53
EY8.2%
EPS(NY)6.82
Fwd EY8.57%
FCF(TTM)3.75
FCFY4.71%
OCF(TTM)9.7
OCFY12.19%
SpS27.49
BVpS31.36
TBVpS4.97
PEG (NY)N/A
PEG (5Y)1.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.53% | ||
| ROE | 9.87% | ||
| ROCE | 8.66% | ||
| ROIC | 7.35% | ||
| ROICexc | 8.81% | ||
| ROICexgc | 21.01% | ||
| OM | 17.16% | ||
| PM (TTM) | 11.26% | ||
| GM | 59.07% | ||
| FCFM | 13.64% |
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-Score6
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 6.47 | ||
| Debt/EBITDA | 1.77 | ||
| Cap/Depr | 130.63% | ||
| Cap/Sales | 21.65% | ||
| Interest Coverage | 33.35 | ||
| Cash Conversion | 104.61% | ||
| Profit Quality | 121.11% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.18 | ||
| Altman-Z | 2.4 |
F-Score6
WACC8.18%
ROIC/WACC0.9
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)1.24%
EPS 3Y4.07%
EPS 5Y7.53%
EPS Q2Q%3.66%
EPS Next Y-0.52%
EPS Next 2Y2.66%
EPS Next 3Y5.11%
EPS Next 5Y8.05%
Revenue 1Y (TTM)3.51%
Revenue growth 3Y4.86%
Revenue growth 5Y6.64%
Sales Q2Q%2.85%
Revenue Next Year3.64%
Revenue Next 2Y4.5%
Revenue Next 3Y5.43%
Revenue Next 5Y6.52%
EBIT growth 1Y-7.93%
EBIT growth 3Y-4.52%
EBIT growth 5Y3.99%
EBIT Next Year49.19%
EBIT Next 3Y20.06%
EBIT Next 5Y17.35%
FCF growth 1Y-25.58%
FCF growth 3Y-6.56%
FCF growth 5Y7.16%
OCF growth 1Y10.33%
OCF growth 3Y2.65%
OCF growth 5Y7.5%