Akamai Technologies Faces Challenges but Maintains Analyst Interest
Company Overview and Market Performance
Founded in 1998 and based in Cambridge, Massachusetts, Akamai Technologies, Inc. (AKAM) is a prominent player in cloud services and content delivery. Specializing in cybersecurity, edge computing, and web performance, the company holds a market cap of $15 billion. Akamai is key to the digital landscape, ensuring secure and efficient online experiences for users and businesses around the globe.
Akamai’s Share Price Lagging
Over the last 52 weeks, Akamai’s stock performance has been less than stellar. The shares have dropped 12.9%, while the broader S&P 500 Index ($SPX) has increased by 22.3%. Yet, so far in 2025, AKAM shows a modest rise of 4.6%, which is slightly better than SPX’s 4% increase.
In comparison to the iShares Expanded Tech-Software Sector ETF (IGV), which has returned 22.4% over the same year, AKAM’s performance appears disappointing, especially with IGV showing a 6.6% gain year-to-date.
Financial Earnings Report Highlights
Akamai’s shares fell 14.4% after its Q3 earnings report on November 7. The company announced revenues of $1 billion, reflecting a 4.1% year-over-year increase that matched analyst estimates of $999.5 million. Adjusted EPS stood at $1.59, consistent with consensus forecasts, while EBITDA was reported at $426.3 million, just topping expectations by 1%. However, caution emerged as the Q4 revenue guidance of $1.01 billion did not meet forecasts.
Future Earnings Outlook and Analyst Sentiment
Akamai’s fiscal Q4 earnings results are expected after the market closes on Thursday, February 20. For the fiscal year 2024, analysts anticipate a 3.6% decline in EPS year-over-year to $4.28. The company’s record of meeting earnings marks reveals challenges; Akamai has only met consensus estimates one time in the past four quarters while falling short the rest.
Among analysts tracking Akamai, the consensus rating is classified as a “Moderate Buy.” This is supported by 13 “Strong Buy” ratings, one “Moderate Buy,” four “Holds,” and one “Strong Sell.”
Recent Analyst Activity and Price Targets
On January 22, analyst Jeff Van Rhee from Craig-Hallum issued a “Buy” rating for Akamai. The consensus mean price target of $114.84 suggests a potential upside of 14.8% compared to current stock levels. The highest price target, at $140, indicates a possible increase of around 40%.
On the date of publication, Rashmi Kumari did not hold positions in any securities mentioned in this article. The information provided is for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
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