Akamai (AKAM) AI Stock Analysis

• Market Cap: $11.26B
• Dividend Yield: N/A
• Average Volume (3M): 2.81M
• Price to Earnings (P/E): 26.0
• Beta (1Y): 0.73
• Revenue Growth: 3.51%
• EPS Growth: -27.28%
• Country: US
• Employees: 10,811
• Sector: Technology
• Sector Strength: 79
• Industry: Software - Infrastructure
• EPS (TTM): 1.70
• Shares Outstanding: 146,206,380
• 10 Day Avg. Volume: 2,030,744
• 30 Day Avg. Volume: 2,810,579
• PEG Ratio: -1.43
• Price to Book (P/B): 3.08
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 16.43
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: 1.01
• Enterprise Value/Gross Profit: 6.76
• Enterprise Value/Ebitda: 3.10
• 1Y Price Target: $93.31
• Price Target Upside: 21.13% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 70 Outperform
• Price Target: $85.00 ▲(10.35%Upside)

Akamai's overall stock score is driven by solid financial performance and positive corporate events. However, neutral technical indicators and valuation metrics suggest moderate future performance, with potential challenges from declining delivery revenue and macroeconomic concerns.

Positive Factors

Financial Performance

Akamai reported strong 1Q25 revenue growth of 2.9% vs Street’s 2.6%, with EPS of $1.70, above Street’s expectations of $1.57, partially driven by better-than-expected revenues and operating activities.

Market Trends

Improved traffic growth and stable trends are encouraging, driving upside to Q2 targets.

Product Development

Large opportunity with AI in security business to enable its products to make better security decisions, and the company recently announced its Firewall for AI solution that prevents prompt injections, data leakage, hallucinations, etc. for AI apps.

Negative Factors

Business Segment Performance

Security and Compute missed expectations by 240bps and 330bps, respectively.

Growth Deceleration

Security and Compute growth rates are decelerating and margins are facing a slower ramp as AKAM looks to build out its smaller Compute and Security products.

Market Conditions

2H growth is implicitly weaker, largely relying on the macroeconomic environment, volatility of USD, and the TikTok decision.

Akamai Business Overview & Revenue Model

Company Description

Akamai Technologies, Inc. provides cloud services for securing, delivering, and optimizing content and business applications over the internet in the United States and internationally. The company offers cloud solutions to keep infrastructure, websites, applications, application programming interfaces, and users safe from various cyberattacks and online threats while enhancing performance. It also provides web and mobile performance solutions to enable dynamic websites and applications; media delivery solutions, including video streaming and video player services, game and software delivery, broadcast operations, authoritative domain name system, resolution, and data and analytics; and edge compute solutions to enable developers to deploy and distribute code at the edge. In addition, the company offers carrier offerings, including cybersecurity protection, parental controls, DNS infrastructure and content delivery solutions; and an array of service and support to assist customers with integrating, configuring, optimizing, and managing its offerings. It sells its solutions through direct sales and service organizations, as well as through various channel partners. Akamai Technologies, Inc. was incorporated in 1998 and is headquartered in Cambridge, Massachusetts.

How the Company Makes Money

Akamai generates revenue through several key streams, primarily focusing on its CDN services, cloud security solutions, and edge computing offerings. The company charges its clients based on data usage, subscription models, and service level agreements. Akamai's CDN services help clients deliver digital content quickly and efficiently, while its security solutions protect against cyber threats. Additionally, Akamai partners with major internet service providers and technology companies to enhance its service offerings, leveraging these partnerships to expand its market reach and customer base. These diverse revenue streams, combined with strategic partnerships, contribute significantly to Akamai's earnings.

Akamai Financial Statement Overview

Summary

Akamai demonstrates strong financial performance with consistent revenue growth and robust profitability margins. The balance sheet is stable, with prudent leverage management and solid equity support. Cash flow statements indicate effective cash generation, though there are minor challenges in free cash flow growth.

Income Statement

Akamai shows strong revenue growth, with a steady increase in total revenue over the years, reaching $4.02 billion in TTM. Gross profit margin remains robust at approximately 59.1% in TTM, indicating efficient cost management. However, the net profit margin has slightly decreased to 11.3% in TTM, suggesting increased expenses or other financial obligations affecting net income. The company's EBIT and EBITDA margins are healthy, reflecting operational efficiency.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 1.01 in TTM, indicating a balanced leverage position. Return on equity (ROE) stands at 9.9% in TTM, which is healthy but shows a slight decline. The equity ratio is strong at 45.9% in TTM, highlighting a stable financial structure with substantial equity backing assets.

Cash Flow

Akamai demonstrates solid cash flow management with an operating cash flow to net income ratio of 3.13 in TTM, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 1.74, showing effective cash utilization. However, the free cash flow growth rate is slightly negative at -5.36%, suggesting minor challenges in cash flow expansion.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.02B	3.99B	3.81B	3.62B	3.46B	3.20B
	Gross Profit
2.37B	2.37B	2.30B	2.23B	2.19B	2.07B
	EBIT
521.27M	533.41M	637.34M	676.27M	783.15M	658.53M
	EBITDA
1.27B	1.26B	1.24B	1.26B	1.35B	1.16B
	Net Income Common Stockholders
452.67M	504.92M	547.63M	523.67M	651.64M	557.05M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.32B	1.60B	864.44M	1.11B	1.08B	1.10B
	Total Assets
9.98B	10.37B	9.90B	8.30B	8.14B	7.76B
	Total Debt
4.62B	4.63B	4.54B	3.17B	2.86B	2.78B
	Net Debt
3.52B	4.12B	4.05B	2.63B	2.32B	2.42B
	Total Liabilities
5.40B	5.49B	5.30B	3.94B	3.61B	3.51B
	Stockholders Equity
4.58B	4.88B	4.60B	4.36B	4.53B	4.25B
Cash Flow		Free Cash Flow
789.20M	833.90M	618.40M	816.37M	859.33M	483.13M
	Operating Cash Flow
1.42B	1.52B	1.35B	1.27B	1.40B	1.22B
	Investing Cash Flow
229.75M	-798.68M	-1.85B	-622.31M	-646.90M	-1.04B
	Financing Cash Flow
-1.02B	-679.63M	443.38M	-634.18M	-562.00M	-223.64M

Akamai Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 77.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AKAM, the sentiment is Negative. The current price of 77.03 is below the 20-day moving average (MA) of 77.11, below the 50-day MA of 77.22, and below the 200-day MA of 90.33, indicating a bearish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 47.42 is Neutral, neither overbought nor oversold. The STOCH value of 62.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AKAM.

Akamai Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FFIV	83 Outperform	$16.46B	27.22	19.89%	―	5.61%	26.65%
FTNT	80 Outperform	$77.18B	41.50	205.91%	―	13.83%	58.13%
NET	74 Outperform	$59.61B	―	-7.35%	―	27.79%	56.19%
ZS	72 Outperform	$47.01B	―	-2.68%	―	25.46%	49.20%
AKAM	70 Outperform	$11.26B	25.98	9.82%	―	3.51%	-27.28%
GDDY	69 Neutral	$25.04B	33.74	245.70%	―	7.93%	-56.44%
Sector *	62 Neutral	$11.80B	10.10	-7.47%	2.99%	7.37%	-8.16%

Akamai Corporate Events

Akamai Completes Convertible Notes Offering and Stock Buyback

On May 19, 2025, Akamai Technologies completed its offering of 0.25% Convertible Senior Notes due in 2033, raising $1.725 billion. The proceeds were used for convertible note hedge transactions and repurchasing 3,870,468 shares of common stock, impacting the company’s financial strategy and market position.

The most recent analyst rating on (AKAM) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on Akamai stock, see the AKAM Stock Forecast page.

Akamai Approves Key Amendments at Annual Meeting

On May 14, 2025, Akamai Technologies held its annual meeting where stockholders approved several significant amendments, including an increase of 8 million shares for the company’s Stock Incentive Plan and changes to its Certificate of Incorporation to eliminate supermajority voting requirements. Additionally, the meeting saw the election of board members and ratification of PricewaterhouseCoopers LLP as the independent accounting firm, reflecting a strategic shift towards more shareholder-friendly governance practices.

The most recent analyst rating on (AKAM) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on Akamai stock, see the AKAM Stock Forecast page.

Akamai Announces Upsized $1.5B Convertible Notes Offering

On May 14, 2025, Akamai Technologies announced the pricing of its upsized private offering of $1.5 billion in convertible senior notes due 2033, aimed at qualified institutional buyers. The offering, increased from an initial $1.35 billion, is expected to close on May 19, 2025, and will help Akamai manage its debt and repurchase shares, potentially impacting its stock market dynamics.

The most recent analyst rating on (AKAM) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on Akamai stock, see the AKAM Stock Forecast page.

Akamai Announces $1.35 Billion Convertible Notes Offering

On May 12, 2025, Akamai Technologies amended its Credit Agreement, increasing its revolving commitments to $1 billion and extending the maturity date to November 2028. This amendment reflects Akamai’s strategic financial management and positions it for future growth. On May 13, 2025, Akamai announced a proposed private offering of $1.35 billion in Convertible Senior Notes due 2033, aimed at refinancing existing debt and repurchasing shares. This move is expected to optimize Akamai’s capital structure and potentially impact its stock market performance.

The most recent analyst rating on (AKAM) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on Akamai stock, see the AKAM Stock Forecast page.