Akamai (AKAM) AI Stock Analysis

• Market Cap: $11.39B
• Dividend Yield: N/A
• Average Volume (3M): 2.72M
• Price to Earnings (P/E): 26.3
• Beta (1Y): 0.74
• Revenue Growth: 3.51%
• EPS Growth: -27.28%
• Country: US
• Employees: 10,811
• Sector: Technology
• Sector Strength: 77
• Industry: Software - Infrastructure
• EPS (TTM): 1.70
• Shares Outstanding: 146,206,380
• 10 Day Avg. Volume: 4,381,281
• 30 Day Avg. Volume: 2,717,870
• PEG Ratio: -5.62
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.36
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 0.97
• Enterprise Value/Gross Profit: 6.44
• Enterprise Value/Ebitda: 2.91
• 1Y Price Target: $98.53
• Price Target Upside: 26.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

Akamai's overall stock score reflects its strong financial position and positive corporate events, despite technical challenges. Growth in key segments and a robust balance sheet are major strengths, with cautious optimism from the earnings call. Valuation is moderate, with no dividend yield to influence investor sentiment.

Positive Factors

Earnings

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

Product Development

The AI firewall release was favorably received at the RSA show, and could be meaningful as enterprises start to look at how to protect against the misuse of AI-based applications and agents.

Negative Factors

Market Sentiment

Shares have decreased by 17% since the 4Q24 earnings, indicating weak sentiment.

Security Segment

The underperformance this quarter came from the security business which slowed to +10% in constant currency, compared to +14% last quarter.

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 makes money primarily through the sale of its CDN services, security solutions, and cloud services. The CDN services help businesses distribute their digital content efficiently and reliably, which is a major revenue driver. Akamai also generates significant income from its cybersecurity offerings, which include web application firewalls, bot management, and threat intelligence services, designed to protect clients from cyber threats. Furthermore, the company's cloud solutions, which enable businesses to enhance their online applications and infrastructure, contribute to its revenue. Akamai's strategic partnerships with major technology companies and its extensive network infrastructure are critical factors that bolster its earnings by expanding its customer base and service capabilities.

Akamai Financial Statement Overview

Summary

Akamai demonstrates solid financial standing with consistent revenue growth and strong cash flow. However, declining net profit margins and ROE pose challenges. The company's balance sheet remains stable with prudent leverage.

Income Statement

Akamai has demonstrated consistent revenue growth with a healthy gross profit margin of 57.5% in TTM. However, there is a decline in net income affecting the net profit margin, currently at 12.6%. The EBIT and EBITDA margins are solid at 13.5% and 26.9% respectively, indicating strong operational efficiency, although there is a noticeable drop in EBIT margin from the previous year.

Balance Sheet

The company's balance sheet shows a stable equity ratio of 47.0%, suggesting a balanced approach to financing. The debt-to-equity ratio is manageable at 0.95, showing prudent leverage usage. However, the return on equity (ROE) has decreased to 10.4%, indicating a lower profitability on shareholder equity compared to previous years.

Cash Flow

Akamai's cash flow is robust with a strong operating cash flow to net income ratio of 3.01, indicating excellent cash conversion from operations. Free cash flow has grown by 34.8% in the TTM, which is a significant improvement. The free cash flow to net income ratio is also healthy at 1.65, reflecting good cash generation relative to net income.

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

Akamai Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 77.87
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 77.87 is below the 20-day moving average (MA) of 79.60, below the 50-day MA of 78.77, and below the 200-day MA of 92.25, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 47.28 is Neutral, neither overbought nor oversold. The STOCH value of 23.19 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
FTNT	80 Outperform	$80.18B	43.12	205.91%	―	13.83%	58.13%
FFIV	79 Outperform	$16.36B	27.06	19.89%	―	5.61%	26.65%
ZS	74 Outperform	$39.08B	―	-1.21%	―	27.77%	89.39%
NET	72 Outperform	$54.60B	―	-7.35%	―	27.79%	56.19%
AKAM	71 Outperform	$11.39B	26.27	9.82%	―	3.51%	-27.28%
GDDY	71 Outperform	$27.10B	36.51	245.70%	―	7.93%	-56.44%
Sector *	60 Neutral	$11.58B	10.33	-7.23%	2.94%	7.47%	-10.84%

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.

Spark’s Take on AKAM Stock

According to Spark, TipRanks’ AI Analyst, AKAM is a Outperform.

Akamai’s overall stock score reflects its strong financial position and positive corporate events, despite technical challenges. Growth in key segments and a robust balance sheet are major strengths, with cautious optimism from the earnings call. Valuation is moderate, with no dividend yield to influence investor sentiment.

To see Spark’s full report on AKAM stock, click here.

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.

Spark’s Take on AKAM Stock

According to Spark, TipRanks’ AI Analyst, AKAM is a Outperform.

Akamai Technologies displays financial resilience with strong revenue and profitability metrics. Technical analysis suggests caution due to bearish trends, while the valuation remains moderate. Recent earnings call and corporate events highlight growth potential, despite some concerns in delivery revenue and macroeconomic factors.

To see Spark’s full report on AKAM stock, click here.

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.

Spark’s Take on AKAM Stock

According to Spark, TipRanks’ AI Analyst, AKAM is a Outperform.

Akamai Technologies displays financial resilience with strong revenue and profitability metrics. Technical analysis suggests caution due to bearish trends, while the valuation remains moderate. Recent earnings call and corporate events highlight growth potential, despite some concerns in delivery revenue and macroeconomic factors.

To see Spark’s full report on AKAM stock, click here.

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.

Spark’s Take on AKAM Stock

According to Spark, TipRanks’ AI Analyst, AKAM is a Outperform.

Akamai’s overall stock score reflects a strong financial position with growth in key segments and solid cash flow. Technical indicators suggest caution due to bearish trends, while valuation is moderate. Positive corporate events and earnings call guidance contribute to a favorable outlook, despite challenges in delivery revenue and macroeconomic concerns.

To see Spark’s full report on AKAM stock, click here.

Akamai CEO Invests $3 Million in Company Stock

On February 27, 2025, Akamai Technologies’ CEO, F. Thomson Leighton, made a significant personal investment by purchasing approximately $3 million of the company’s common stock on the open market. This move could indicate confidence in the company’s future prospects and may have implications for investor sentiment and market perception.

Akamai Approves 2025 Executive Compensation Program

On February 19, 2025, Akamai Technologies’ Board of Directors approved a 2025 bonus and equity compensation program for its top executives, including CEO F. Thomson Leighton and CFO Edward McGowan. The program ties executive bonuses to corporate performance objectives, with a focus on revenue and adjusted operating income targets, and includes a modifier based on environmental, social, and governance (ESG) objectives. Executives will receive bonuses in the form of vested common stock, and restricted stock units (RSUs) will be granted on March 3, 2025. These RSUs will vest based on both corporate performance and stock performance relative to the S&P 500 Index over a three-year period, impacting Akamai’s strategic focus on long-term growth and shareholder value.

Akamai Reports Strong Revenue Growth in 2024

On February 20, 2025, Akamai Technologies reported its financial results for the fourth quarter and full year of 2024, showing a steady increase in revenue, with a 3% rise in the fourth quarter and a 5% increase for the full year, despite challenges in delivery revenue. Security and compute revenue saw significant growth, with 16% and 25% year-over-year increases, respectively. The company is undergoing a transformation to cement its role as a leader in cybersecurity and cloud solutions, maintaining robust profitability with a strategic focus on long-term success.