NasdaqGS:AKAM

Stock Analysis Report

Executive Summary

Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally.

Rewards

Trading at 24.8% below its fair value

Earnings are forecast to grow 9.28% per year

Earnings grew by 95.3% over the past year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Proven track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Akamai Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AKAM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.2%

AKAM

0.2%

US IT

0.8%

US Market


1 Year Return

23.9%

AKAM

30.7%

US IT

17.8%

US Market

Return vs Industry: AKAM underperformed the US IT industry which returned 30.7% over the past year.

Return vs Market: AKAM exceeded the US Market which returned 17.8% over the past year.


Shareholder returns

AKAMIndustryMarket
7 Day-1.2%0.2%0.8%
30 Day-1.6%2.7%1.8%
90 Day-7.8%2.1%4.1%
1 Year23.9%23.9%32.1%30.7%20.4%17.8%
3 Year23.3%23.3%96.6%88.1%45.9%36.4%
5 Year33.3%33.3%137.2%116.2%68.1%49.6%

Price Volatility Vs. Market

How volatile is Akamai Technologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Akamai Technologies undervalued compared to its fair value and its price relative to the market?

24.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AKAM ($83.34) is trading below our estimate of fair value ($110.88)

Significantly Below Fair Value: AKAM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AKAM is good value based on its PE Ratio (30x) compared to the IT industry average (30.2x).

PE vs Market: AKAM is poor value based on its PE Ratio (30x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: AKAM is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: AKAM is overvalued based on its PB Ratio (3.8x) compared to the US IT industry average (3.7x).


Next Steps

Future Growth

How is Akamai Technologies forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AKAM's forecast earnings growth (9.3% per year) is above the savings rate (1.7%).

Earnings vs Market: AKAM's earnings (9.3% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: AKAM's earnings are forecast to grow, but not significantly.

Revenue vs Market: AKAM's revenue (7% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: AKAM's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AKAM's Return on Equity is forecast to be high in 3 years time (20.9%)


Next Steps

Past Performance

How has Akamai Technologies performed over the past 5 years?

-0.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AKAM has high quality earnings.

Growing Profit Margin: AKAM's current net profit margins (16%) are higher than last year (8.7%).


Past Earnings Growth Analysis

Earnings Trend: AKAM's earnings have declined by -0.1% per year over the past 5 years.

Accelerating Growth: AKAM's earnings growth over the past year (95.3%) exceeds its 5-year average (-0.1% per year).

Earnings vs Industry: AKAM earnings growth over the past year (95.3%) exceeded the IT industry 17%.


Return on Equity

High ROE: AKAM's Return on Equity (12.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Akamai Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: AKAM's short term assets ($2.3B) exceed its short term liabilities ($602.5M).

Long Term Liabilities: AKAM's short term assets ($2.3B) exceed its long term liabilities ($2.3B).


Debt to Equity History and Analysis

Debt Level: AKAM's debt to equity ratio (52.1%) is considered high.

Reducing Debt: AKAM's debt to equity ratio has increased from 21.1% to 52.1% over the past 5 years.

Debt Coverage: AKAM's debt is well covered by operating cash flow (58.3%).

Interest Coverage: AKAM's interest payments on its debt are well covered by EBIT (31.4x coverage).


Balance Sheet

Inventory Level: AKAM has a high level of physical assets or inventory.

Debt Coverage by Assets: AKAM's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Akamai Technologies's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate AKAM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate AKAM's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if AKAM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if AKAM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AKAM's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Akamai Technologies's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Tom Leighton (62yo)

6.9yrs

Tenure

US$11,347,676

Compensation

Dr. F. Thomson Leighton, also known as Tom, co-founded Akamai Technologies, Inc. in 1998 and has been its Chief Executive Officer since January 1, 2013. Dr. Leighton is Akamai's technology visionary and le ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD11.35M) is about average for companies of similar size in the US market ($USD10.94M).

Compensation vs Earnings: Tom's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.5yrs

Average Tenure

53yo

Average Age

Experienced Management: AKAM's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

3.9yrs

Average Tenure

62yo

Average Age

Experienced Board: AKAM's board of directors are considered experienced (3.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$233,22003 Jun 19
Frederic Salerno
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares3,000
Max PriceUS$77.74

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Rick McConnell (53yo)

    President & GM of Web Division

    • Tenure: 3.6yrs
    • Compensation: US$5.82m
  • Tom Leighton (62yo)

    Co-Founder

    • Tenure: 6.9yrs
    • Compensation: US$11.35m
  • Bobby Blumofe (54yo)

    Executive VP of Platform & GM of Enterprise Division

    • Tenure: 11.9yrs
    • Compensation: US$4.12m
  • Ed McGowan

    Executive VP & CFO

    • Tenure: 0.8yrs
  • Adam Karon (47yo)

    Executive VP and GM of Media & Carrier Divisions

    • Tenure: 2.8yrs
    • Compensation: US$3.29m
  • Tom Barth

    Head of Investor Relations

    • Tenure: 6.3yrs
  • Keith Oslakovic

    Senior Vice President of Global Performance & Operations

    • Tenure: 0.9yrs
  • Mani Sundaram

    Executive VP of Global Services & Support and Chief Information Officer

    • Tenure: 1.1yrs
  • Aaron Ahola (49yo)

    Executive VP

    • Tenure: 2.2yrs
  • Kim Salem Jackson

    Senior Vice President of Global Marketing & Corporate Communications

    • Tenure: 0.2yrs

Board Members

  • Ben Verwaayen (67yo)

    Independent Director

    • Tenure: 6.1yrs
    • Compensation: US$324.95k
  • Tom Leighton (62yo)

    Co-Founder

    • Tenure: 6.9yrs
    • Compensation: US$11.35m
  • Monte Ford (59yo)

    Independent Director

    • Tenure: 6.5yrs
    • Compensation: US$299.96k
  • Jon Miller (63yo)

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: US$299.96k
  • Fred Salerno (75yo)

    Independent Chairman of the Board

    • Tenure: 1.8yrs
    • Compensation: US$359.98k
  • Dan Hesse (65yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$299.96k
  • Bill Wagner (52yo)

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: US$224.96k
  • Jill Greenthal (62yo)

    Independent Director

    • Tenure: 12.2yrs
    • Compensation: US$309.98k
  • Madhu Ranganathan (54yo)

    Director

    • Tenure: 0.5yrs
  • Tom Killalea (51yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$224.96k

Company Information

Akamai Technologies, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Akamai Technologies, Inc.
  • Ticker: AKAM
  • Exchange: NasdaqGS
  • Founded: 1998
  • Industry: Internet Services and Infrastructure
  • Sector: Software
  • Market Cap: US$13.468b
  • Shares outstanding: 161.60m
  • Website: https://www.akamai.com

Number of Employees


Location

  • Akamai Technologies, Inc.
  • Kendall Square
  • 145 Broadway
  • Cambridge
  • Massachusetts
  • 2142
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AKAMNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDOct 1999
AK3DB (Deutsche Boerse AG)YesCommon SharesDEEUROct 1999
AK3XTRA (XETRA Trading Platform)YesCommon SharesDEEUROct 1999
AKAMWBAG (Wiener Boerse AG)YesCommon SharesATEUROct 1999
0HBQLSE (London Stock Exchange)YesCommon SharesGBUSDOct 1999
AK3ETLX (Eurotlx)YesCommon SharesITEUROct 1999

Biography

Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally. It provides cloud se ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/12 23:31
End of Day Share Price2019/12/12 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.