Street Calls of the Week
Akamai Technologies Inc (NASDAQ:AKAM). shares have reached a 52-week low, dipping to $84.64, as the company navigates through a challenging market environment. The $12.8 billion market cap company, known for its content delivery and cloud services, is currently trading below its InvestingPro Fair Value, suggesting potential undervaluation despite market headwinds. This latest price level reflects a significant downturn from previous periods, marking a notable moment for investors and the company alike. While the stock trades at a P/E ratio of 28.3x, management has been actively buying back shares, demonstrating confidence in the company’s prospects. Over the past year, Akamai’s stock has experienced a downward trajectory, with a 1-year change showing a nearly 20% decrease in value. This decline comes despite the company maintaining 4.7% revenue growth, underscoring the volatility and pressures faced by the tech sector. Discover more insights and 6 additional key tips about AKAM with an InvestingPro subscription, including detailed valuation analysis and growth prospects.
In other recent news, Akamai Technologies reported its fourth-quarter earnings, with revenue reaching $1,019.9 million and earnings per share of $1.66, surpassing analyst expectations. The company experienced a 2.5% year-over-year growth, driven by a 25% increase in Compute and a 14% rise in Security, despite an 18% decline in Delivery. However, Akamai’s guidance for 2025 fell below street expectations, with projected revenue growth of 2-3%, impacted by foreign exchange headwinds and a moderation in Security growth. Several analyst firms have adjusted their outlooks on Akamai, with Scotiabank (TSX:BNS) maintaining a Sector Outperform rating but lowering the price target to $107, and BofA Securities downgrading the stock to Neutral with a reduced target of $100. Raymond (NSE:RYMD) James also cut its price target to $110 but maintained an Outperform rating, citing the company’s strategic focus on compute and security segments. Evercore ISI echoed a similar sentiment, reducing the price target to $105 while highlighting Akamai’s robust fourth-quarter performance and strategic shift towards Security and Compute. Piper Sandler downgraded Akamai to Neutral, with a price target of $100, pointing to concerns about the company’s 2025 guidance and the challenges it faces in its core business segments. These developments reflect a cautious but optimistic outlook on Akamai’s ongoing transition and strategic focus in high-growth areas.
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