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AKAMAI TECHNOLOGIES INC (AKAM) Stock Fundamental Analysis

NASDAQ:AKAM - Nasdaq - US00971T1016 - Common Stock

94.71  +3.7 (+4.07%)

After market: 94.71 0 (0%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to AKAM. AKAM was compared to 82 industry peers in the IT Services industry. AKAM scores excellent on profitability, but there are some minor concerns on its financial health. AKAM is not valued too expensively and it also shows a decent growth rate.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

In the past year AKAM was profitable.
AKAM had a positive operating cash flow in the past year.
Each year in the past 5 years AKAM has been profitable.
Each year in the past 5 years AKAM had a positive operating cash flow.
AKAM Yearly Net Income VS EBIT VS OCF VS FCFAKAM Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B

1.2 Ratios

AKAM's Return On Assets of 5.16% is fine compared to the rest of the industry. AKAM outperforms 65.82% of its industry peers.
Looking at the Return On Equity, with a value of 10.98%, AKAM is in the better half of the industry, outperforming 70.89% of the companies in the same industry.
AKAM has a Return On Invested Capital of 7.24%. This is in the better half of the industry: AKAM outperforms 67.09% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AKAM is in line with the industry average of 9.86%.
Industry RankSector Rank
ROA 5.16%
ROE 10.98%
ROIC 7.24%
ROA(3y)6.61%
ROA(5y)6.77%
ROE(3y)12.77%
ROE(5y)12.9%
ROIC(3y)7.91%
ROIC(5y)7.94%
AKAM Yearly ROA, ROE, ROICAKAM Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10

1.3 Margins

AKAM has a better Profit Margin (13.27%) than 91.14% of its industry peers.
In the last couple of years the Profit Margin of AKAM has grown nicely.
AKAM's Operating Margin of 18.22% is amongst the best of the industry. AKAM outperforms 92.41% of its industry peers.
In the last couple of years the Operating Margin of AKAM has grown nicely.
The Gross Margin of AKAM (59.68%) is better than 78.48% of its industry peers.
AKAM's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 18.22%
PM (TTM) 13.27%
GM 59.68%
OM growth 3Y-4.14%
OM growth 5Y2.97%
PM growth 3Y-6.22%
PM growth 5Y5.5%
GM growth 3Y-2.19%
GM growth 5Y-1.4%
AKAM Yearly Profit, Operating, Gross MarginsAKAM Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60

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4

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AKAM is destroying value.
The number of shares outstanding for AKAM has been reduced compared to 1 year ago.
Compared to 5 years ago, AKAM has less shares outstanding
Compared to 1 year ago, AKAM has a worse debt to assets ratio.
AKAM Yearly Shares OutstandingAKAM Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M
AKAM Yearly Total Debt VS Total AssetsAKAM Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B

2.2 Solvency

AKAM has an Altman-Z score of 2.61. This is not the best score and indicates that AKAM is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.61, AKAM is in line with its industry, outperforming 45.57% of the companies in the same industry.
The Debt to FCF ratio of AKAM is 4.33, which is a neutral value as it means it would take AKAM, 4.33 years of fcf income to pay off all of its debts.
AKAM has a Debt to FCF ratio (4.33) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.50 indicates that AKAM is not too dependend on debt financing.
The Debt to Equity ratio of AKAM (0.50) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.5
Debt/FCF 4.33
Altman-Z 2.61
ROIC/WACC0.68
WACC10.71%
AKAM Yearly LT Debt VS Equity VS FCFAKAM Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B

2.3 Liquidity

AKAM has a Current Ratio of 1.33. This is a normal value and indicates that AKAM is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.33, AKAM is not doing good in the industry: 64.56% of the companies in the same industry are doing better.
A Quick Ratio of 1.33 indicates that AKAM should not have too much problems paying its short term obligations.
The Quick ratio of AKAM (1.33) is worse than 62.03% of its industry peers.
Industry RankSector Rank
Current Ratio 1.33
Quick Ratio 1.33
AKAM Yearly Current Assets VS Current LiabilitesAKAM Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B 2.5B

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5

3. Growth

3.1 Past

AKAM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.36%, which is quite good.
AKAM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.34% yearly.
AKAM shows a small growth in Revenue. In the last year, the Revenue has grown by 5.92%.
The Revenue has been growing slightly by 7.03% on average over the past years.
EPS 1Y (TTM)10.36%
EPS 3Y5.96%
EPS 5Y11.34%
EPS Q2Q%-2.45%
Revenue 1Y (TTM)5.92%
Revenue growth 3Y6.03%
Revenue growth 5Y7.03%
Sales Q2Q%4.06%

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 9.95% yearly.
The Revenue is expected to grow by 7.42% on average over the next years.
EPS Next Y4.24%
EPS Next 2Y5.5%
EPS Next 3Y7.24%
EPS Next 5Y9.95%
Revenue Next Year4.42%
Revenue Next 2Y5.56%
Revenue Next 3Y6.46%
Revenue Next 5Y7.42%

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 stable.
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.
AKAM Yearly Revenue VS EstimatesAKAM Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 1B 2B 3B 4B 5B
AKAM Yearly EPS VS EstimatesAKAM Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2 4 6 8 10

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6

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 14.57, the valuation of AKAM can be described as correct.
Based on the Price/Earnings ratio, AKAM is valued cheaper than 86.08% of the companies in the same industry.
AKAM is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.70, which indicates a correct valuation of AKAM.
Based on the Price/Forward Earnings ratio, AKAM is valued cheaply inside the industry as 84.81% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, AKAM is valued a bit cheaper.
Industry RankSector Rank
PE 14.57
Fwd PE 13.7
AKAM Price Earnings VS Forward Price EarningsAKAM Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

AKAM's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AKAM is cheaper than 81.01% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AKAM is valued cheaper than 82.28% of the companies in the same industry.
Industry RankSector Rank
P/FCF 17.38
EV/EBITDA 10.65
AKAM Per share dataAKAM EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AKAM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.43
PEG (5Y)1.29
EPS Next 2Y5.5%
EPS Next 3Y7.24%

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0

5. Dividend

5.1 Amount

AKAM does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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AKAMAI TECHNOLOGIES INC

NASDAQ:AKAM (1/21/2025, 8:00:00 PM)

After market: 94.71 0 (0%)

94.71

+3.7 (+4.07%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)11-07 2024-11-07/amc
Earnings (Next)02-11 2025-02-11/amc
Inst Owners97.99%
Inst Owner Change0.01%
Ins Owners1.86%
Ins Owner Change-1.52%
Market Cap14.23B
Analysts80
Price Target117.83 (24.41%)
Short Float %6.25%
Short Ratio4.67
Dividend
Industry RankSector 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)-0.4%
Min EPS beat(2)-1.88%
Max EPS beat(2)1.08%
EPS beat(4)3
Avg EPS beat(4)0.8%
Min EPS beat(4)-1.88%
Max EPS beat(4)3.81%
EPS beat(8)7
Avg EPS beat(8)2.92%
EPS beat(12)10
Avg EPS beat(12)2.05%
EPS beat(16)13
Avg EPS beat(16)1.93%
Revenue beat(2)0
Avg Revenue beat(2)-1.57%
Min Revenue beat(2)-1.73%
Max Revenue beat(2)-1.41%
Revenue beat(4)0
Avg Revenue beat(4)-1.87%
Min Revenue beat(4)-2.26%
Max Revenue beat(4)-1.41%
Revenue beat(8)2
Avg Revenue beat(8)-1.17%
Revenue beat(12)2
Avg Revenue beat(12)-1.27%
Revenue beat(16)3
Avg Revenue beat(16)-1.11%
PT rev (1m)-0.05%
PT rev (3m)-2.33%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-14.19%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.36%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-5.17%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.27%
Valuation
Industry RankSector Rank
PE 14.57
Fwd PE 13.7
P/S 3.59
P/FCF 17.38
P/OCF 9.09
P/B 2.97
P/tB 13.51
EV/EBITDA 10.65
EPS(TTM)6.5
EY6.86%
EPS(NY)6.91
Fwd EY7.3%
FCF(TTM)5.45
FCFY5.75%
OCF(TTM)10.41
OCFY11%
SpS26.4
BVpS31.91
TBVpS7.01
PEG (NY)3.43
PEG (5Y)1.29
Profitability
Industry RankSector Rank
ROA 5.16%
ROE 10.98%
ROCE 8.81%
ROIC 7.24%
ROICexc 9.13%
ROICexgc 21.47%
OM 18.22%
PM (TTM) 13.27%
GM 59.68%
FCFM 20.64%
ROA(3y)6.61%
ROA(5y)6.77%
ROE(3y)12.77%
ROE(5y)12.9%
ROIC(3y)7.91%
ROIC(5y)7.94%
ROICexc(3y)9.12%
ROICexc(5y)9.47%
ROICexgc(3y)16.28%
ROICexgc(5y)15.9%
ROCE(3y)9.62%
ROCE(5y)9.66%
ROICexcg growth 3Y-4.45%
ROICexcg growth 5Y-24.99%
ROICexc growth 3Y-8.88%
ROICexc growth 5Y-14.1%
OM growth 3Y-4.14%
OM growth 5Y2.97%
PM growth 3Y-6.22%
PM growth 5Y5.5%
GM growth 3Y-2.19%
GM growth 5Y-1.4%
F-Score5
Asset Turnover0.39
Health
Industry RankSector Rank
Debt/Equity 0.5
Debt/FCF 4.33
Debt/EBITDA 1.77
Cap/Depr 118.73%
Cap/Sales 18.8%
Interest Coverage 35.63
Cash Conversion 115.82%
Profit Quality 155.62%
Current Ratio 1.33
Quick Ratio 1.33
Altman-Z 2.61
F-Score5
WACC10.71%
ROIC/WACC0.68
Cap/Depr(3y)108.48%
Cap/Depr(5y)122.71%
Cap/Sales(3y)16.92%
Cap/Sales(5y)18.84%
Profit Quality(3y)126.2%
Profit Quality(5y)112.52%
High Growth Momentum
Growth
EPS 1Y (TTM)10.36%
EPS 3Y5.96%
EPS 5Y11.34%
EPS Q2Q%-2.45%
EPS Next Y4.24%
EPS Next 2Y5.5%
EPS Next 3Y7.24%
EPS Next 5Y9.95%
Revenue 1Y (TTM)5.92%
Revenue growth 3Y6.03%
Revenue growth 5Y7.03%
Sales Q2Q%4.06%
Revenue Next Year4.42%
Revenue Next 2Y5.56%
Revenue Next 3Y6.46%
Revenue Next 5Y7.42%
EBIT growth 1Y-0.04%
EBIT growth 3Y1.64%
EBIT growth 5Y10.21%
EBIT Next Year48.12%
EBIT Next 3Y20.47%
EBIT Next 5Y16.57%
FCF growth 1Y-5.11%
FCF growth 3Y3.64%
FCF growth 5Y-3.76%
OCF growth 1Y18.52%
OCF growth 3Y3.53%
OCF growth 5Y5.99%