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Investing.com - DA Davidson has reiterated its Buy rating and $115.00 price target on Akamai Technologies (NASDAQ:AKAM), currently trading at $73.67, ahead of the company’s third-quarter earnings report scheduled for November 6. According to InvestingPro data, 21 analysts have recently revised their earnings estimates upward, with price targets ranging from $66 to $133.
The firm expects Akamai to deliver another beat-and-raise quarter driven by its Delivery segment, which it forecasts will exceed consensus estimates. DA Davidson’s analysis suggests the company will report Delivery revenue above both its own estimates and broader market expectations. The company’s solid financial position is evidenced by its healthy current ratio of 2.31 and stable revenue growth of approximately 4% over the last twelve months.
The research firm noted potential misalignment in market expectations, warning that consensus appears to be incorrectly modeling Compute Revenue for Q3, which could result in a headline miss for that segment despite underlying strength.
Despite this potential segment-specific shortfall, DA Davidson maintains confidence that Akamai will achieve its guidance of 40-45% year-over-year growth in CIS ARR (Cloud and Infrastructure Security Annual Recurring Revenue) at constant currency by year-end.
The firm acknowledged that another Delivery-driven beat might be viewed as "low quality" by some investors, but emphasized that continued improvements in Delivery declines would help drive meaningful overall growth acceleration for Akamai.
In other recent news, Akamai Technologies reported a strong second-quarter performance, with DA Davidson reiterating a Buy rating and a price target of $115. The company’s results were bolstered by its Delivery segment, which saw better-than-expected traffic growth and pricing, while its Security performance also slightly exceeded expectations. However, the Compute segment fell slightly short of projections. In addition to its financial performance, Akamai has been active in expanding its service offerings and partnerships. The company launched a Managed Service for API Performance to enhance API speed, reliability, and compliance, and it introduced Hype Event Protection in collaboration with Queue-it to prevent bots from overwhelming online sales events. Furthermore, Akamai expanded its partnership with Apiiro to enhance application security throughout the software development lifecycle. Meanwhile, TriNet Group announced the appointment of tech veterans Janet Kennedy and Madhu Ranganathan to its Board of Directors.
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