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Akamai Technologies, Inc. (XNAS:AKAM) In-Depth Stock/Fundamental/Options Analysis Today

Primary Facts

AKAM

Name:

AKAMAI TECHNOLOGIES, INC. (XNAS:AKAM)

Sector:

91.09M

Industry:

Software�Infrastructure

CEO:

Dr. F. Thomson Leighton

Total Employees:

8,700

Our Technological Advancement Rating

Our Rating:

D

Technological advancement compared to industry is -91.40% lower

ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AKAMAI TECHNOLOGIES, INC.(AKAM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022

Primary Targets/Price Insights

Previous Close ($) :

88.26

One Month Price Target:

$88.59

Six Month Price Target :

$90.22

Likely Price in One Year's Time:

Ticker:

$92.18

Likely Trading Range Today Under (Normal Volatility)
 

$87.99

Price Upper limit ($) :

$88.58

Price Lower limit ($) :

Crash Risk Prep/Key Price Levels (High Volatility/Risk)

Price, as per data analysis, isn't likely to fall below:

Today:

$84.69

                                                               This week:

$80.28

                                                        This month :

$72.31

Other Primary facts

Market Cap:

14.03B

Market Cap Classification:

Mid Cap

Number of Shares

IPO Date:

158.96M

Best/Worst Daily Performance (Last 3+ Years)
 

Highest Daily Appreciation:

9.8%

-10.91%

Worst Daily Decline:

Our Options Trading Entry Points

Iron Condor entry points for options expiring in 1 week's time

Low risk (<2%) entry points

Buy Call:

Sell Call:

Buy Put:

Sell Put:

$104.82

$97.24

$71.70

$79.28

Medium risk (<10%) entry points

Buy Call

Sell Call

$94.77

Buy Put:

Sell Put:

$93.15

$81.73

$83.37

These entry points can be used for other strategies, such as butterflies, straddles, etc.

Risk-Adjusted returns (Sharpe Ratio) of

AKAM

Sharpe Ratio:

0.93%

Comparison:

AKAM, is amongst the top 60% stocks with highest risk-adjusted returns

Sharpe ratio is -43.18% lower than the industry

& is -59.24% lower than the market/S&P 500 average

Average Returns/Yield of

AKAM

Daily returns:

0.03%

Weekly returns:

0.14%

Monthly returns:

0.55%

Yearly returns:

14.38%

Comparison of returns:

Average annual returns/yield (last 3 years) is -54.52% below industry average

Classification:

AKAM, is amongst the top 60% highest yielding stocks in terms of daily returns

Results of T-Test of Returns:

0.83

Statistical test of Returns:

AKAM has yielded returns statistically similar to the market

SHARPE ratio explained.png

Volatility (measured by Standard Deviation)

Daily Volatility:

1.98%

Weekly Volatility:

4.43%

Monthly Volatility:

8.86%

Yearly Volatility:

30.69%

Volitlilty of last five days (Measured by Standard Deviation) 

Average Volatility of this Week:

1.06%

Volatility in last five trading days has been -46.46% below long-term volatility

Value at Risk Analysis (VaR)

Daily VaR:

-4.04%

Weekly VaR:

-9.04%

Monthly VaR:

-18.08%

How Much Can the price of

AKAM

Decline in a Recession?

Likely price decline in a recession: 

Base case (decline):

-16%

Worst case (decline):

-62.61%

This translates to price declining to:

$74.43

This translates to price declining to:

$33.00

Severe Crash Probability

Risk of crash in next 6/12 months: Medium (<50%)

What is Value at Risk (VaR)?

VaR explained figure

Risk Fundamentals

AKAM is a 27.57% riskier investment compared to the market/S&P 500 & is 9.29% riskier than Nasdaq (IXIC)

Risk (measured by volatility) is -40.54% below industry average

Overall, it is amongst the top 50% most risky stocks

Beta Examination of

AKAM

Beta in relation to market/S&P 500--0.66

Expected beta in 1 year's time:

0.492

Expected beta in 3 year's time:

0.696

Unlevered (debt free) Beta:

0.41

Beta in relation to Nasdaq (XNAS):

0.577

Beta in relation to all global stocks::

0.447

Beta Comparison & Analysis

Beta of competitors/peers::

1.498

Beta is -55.89% lower than peers

Average Industry Beta: 

1.112

Beta is -40.56% below industry average

Sustainable Growth Rate Analysis

Sustainable growth rate for this stock/firm:

13.71%

Sustainable growth rate is -96.29% below industry average

Alpha provided | Alpha Analysis 

Alpha provided:

-0.011

Alpha is -131.38% below industry average alpha yield

Alpha is -72% below the market average

Analysis of Cost of Capital of

AKAM

Equity cost of capital:

0.077

Equity cost of capital is -28.69% below industry mean WACC

Unlevered (without debt) cost of capital:  

4.76%

Before-tax cost of debt:

1.77%

After-tax cost of debt:

1.40%

Overall debt rating:

Highest AAA investment grade

Weighted average cost of capital (WACC):

1.40%

WACC is -30.68% below industry mean WACC

Key Per-Share Metrics & Analysis

Revenue per share:

$22.16

Revenue growth rate per share of (3Y):

3.26

Annual revenue growth rate is -57.09% below industry average

EPS:

$3.72

Expected Annual growth rate of  EPS (3Y):

10.16%

Expected future EPS growth rate is -66.28% lower than the Software�Infrastructure industry

Free cash flow (FCF) per share:

$5.35

-

-

Debt per share

$18.78

EBITDA per share

$8.30

Valuation Analysis Today of

AKAM

P/E Ratio:

25.1

P/E Ratio of Competitors/Peers:

262.06

P/E ratio is -90.42% lower than main peers & is -61.53% lower than the industry

Stock price/value with industry average P/E ratio: $242.68

AKAM is -63.63% undervalued if valued using industry average P/E ratio

-

-

P/S (Price to Sales ratio):

3.98

Price to sales ratio is -63.73% below the industry mean

P/B (Price to book value ratio):

3.26

Price to free cash flow: 16.51

Price to free cash flow ratio is -51.63% lower than the industry

Net income growth rate (3Y):

124.88%

Net income growth rate is -98.53% lower than the industry average net income growth rate

Dividend Analysis

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Dividend History:

--$0.00

--$0.00

--$0.00

--$0.00

--$0.00

--$0.00

-

In-depth Debt & Leverage Analysis

Debt to equity ratio:

69.42%

Net debt to equity ratio:

66.65%

Debt to assets ratio:

35.95%

Net debt to assets ratio:

34.52%

Debt-to-asset ratio is -48.44% below industry average

Ability to repay debt:

Interest coverage ratio:

22.98

Interest coverage ratio is -110.89% less than industry average

Looking forward:

Debt growth rate:

38.68%

Annual debt growth is -64% lower than industry average debt growth rate

Debt repayment rate in last quarter: 0.00%

Analysis of Key Statistics  

Correlation of price movement with the market:

0.511

Statistical significance of correlation:

AKAM has a statistically significant correlation with the market

Average Correlation of  the industry with the market:

0.48

Stock price is 6.56% more correlated with the market, compared to the industry average correlation

R Squared (percentage of price movement explained by movement of the market): 

0.48

Correlation of price movement with Nasdaq (^IXIC):

-0.015

Covariance  of price movement with the market:

-0.017

Kurtosis 

5.454

Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns

Skewness of returns:

-0.657

Returns are left (negative) skewed; mean returns are lower than median and mode returns

Fundamental Analysis & Dupont Analysis of

AKAM

Gross Profit Margin Ratio:

253%

Operating Profit Margin Ratio:

21.98%

Operating profit margin is -285.18% lower than the industry

Net Profit Margin Ratio:

253%

Effective Tax Rate:

11.75%

Effective tax rate is -62.48% lower than the industry

Dupont Method

Net Profit Margin

Return on Equity Ratio (ROE):

×

ROA

=

×

14.30%

Return on equity (ROE) is -86.60% lower than the industry

Financial Leverage

Asset Turnover Ratio (ROA):

7.41%

Return on assets (ROA) is -295.61% lower than the industry

Financial Leverage:

1.6x

Current Ratio:

1.68

Current ratio is -27.63% below industry average

Cash Conversion Cycle (days):

39.7

Cash conversion cycle is -64.77% below industry average

The remaining useful life of property plant & equipment is: 8.4 years

Stock based compensation to net income ratio:

9.14%

In-depth Efficiency  Analysis

Revenue generated per employee:

404.8K

Each employee generates 3% more revenue than industry average revenue per employee

EBITDA generated per employee: 

151.6K

Each employee generates 132% more EBITDA than industry average revenue per employee

Profit generated per employee: 

70.7K

Each employee generates 238% more net income/profit than industry average revenue per employee

Free cash flow (FCF) generated per employee: 

10.5K

Each employee generates -47% less free cash flow than industry average revenue per employee

Assets/Capital per employee

786.1K

Each employee generates -47% less free cash flow than industry average revenue per employee

Research & Development (R&D) Analysis

Research & development (R&D) investment growth rate-- 24.53%

Growth rate in R&D investment/expenditure is -1045.90% lower than the industry

Competitors/Peer firms of 

AKAM

NICE LTD (XNAS:NICE)

ENTEGRIS, INC. (XNAS:ENTG)

CONFLUENT, INC. (XNAS:CFLT)

NUANCE COMMUNICATIONS, INC. (XNAS:NUAN)

QORVO, INC. (XNAS:QRVO)

SABRP

QUALTRICS INTERNATIONAL INC. (XNAS:XM)

ENPHASE ENERGY, INC. (XNAS:ENPH)

TRIMBLE INC. (XNAS:TRMB)

Current Analyst Ratings

Strong buy�17%

Buy�29%

Hold�54%

Sell�8%

Strong sell�0%

Overall analyst sentiment is: Hold

Income Statement

Period:

TTM

Date:

3/31/22

Revenue:

3.52B

Cost of Revenue:

Gross Profit:

R&D Expense

General & Admin Expenses:

Selling, General & Admin Expenses

Sales and Marketing Expenses

Other Expenses :

Operating Expenses :

Cost & Expenses :

Interest Income:

Interest Expenses:

Depreciation & Amortization:

EBITDA:

Operating Income:

Other Income Expenses:

Income Before Tax:

Income Tax Expense:

Net Income:

Balance Sheet

Date:

Calendar Year:

Period:

Cash & Cash Equivalents:

Short Term Investments:

Cash & Short Term Investments:

Net Receivables:

Inventory:

Other Current Assets:

Total Current Assets:

PP&E:

Goodwill: 

Intangible Assets: 

Long Term Investments: 

Tax Assets: 

Other Non-Current Assets: 

Total Non-Current Assets: 

Other Assets: 

Total Assets: 

Accounts Payable: 

Short Term Debt:

Tax Payables:

Deferred Revenue:

Other Current Liabilities:

Total Current Liabilities:

Long Term Debt:

Other Non-Current Liabilities:

Total Non Current Liabilities:

Other Liabilities:

Total Liabilities:

Common Stock:

Retained Earnings:

Accumulated Other Comprehensive Loss:

Other Total Stockholders' Equity:

Total Stockholders' Equity:

Total Liabilities and Stockholders' Equity:

Total Investments:

Total Debt:

Net Debt:

1.30B

2.23B

353.26M

462.69M

931.02M

468.33M

133.25M

1.42B

11.04M

57.40M

561.76M

1.32B

774.10M

615.11M

720.78M

84.72M

615.11M

Statement of Cash Flow

Date:

Period:

142.60M

Differed Income Tax :

- 13579.00K

Stock Based Compensation :

56.23M

Change in Working Capital :

- 112208.00K

Accounts Receivables:

- 39198.00K

Other Working Capital:

60.06M

Other Non-Cash Items:

30.25M

Net Cash Provided by Operating Activities:

222.45M

Investments in PP&E:

- 51005.00K

Net Acquisitions:

- 872099.00K

Purchases of Investments:

-

Sales/Maturities of Investments:

Other Investing Activities:

​Net Cash Used for Investing Activities:

Debt Repayment:

Common Stock Issued:

Common Stock Repurchased:

Dividend Paid:

Other Financing Activities:

Net Cash Used Provided by Financing Activities:

Effect of FOREX on Changes in Cash:

Net Changes in Cash:

Cash at End of Period:

Cash at Beginning of Period:

Operating Cash Flow:

Capital Expenditure:

Free Cash Flow (FCF):

3/31/22

2022

Q1

377.81M

129.06M

506.87M

718.79M

-

238.82M