RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Akamai Technologies, Inc. (XNAS:AKAM) InDepth 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/LONGTERM 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.
RiskAdjusted returns (Sharpe Ratio) of
AKAM
Sharpe Ratio:
0.93%
Comparison:
AKAM, is amongst the top 60% stocks with highest riskadjusted 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 TTest of Returns:
0.83
Statistical test of Returns:
AKAM has yielded returns statistically similar to the market
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 longterm 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)?
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 5000.66
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%
Beforetax cost of debt:
1.77%
Aftertax 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 PerShare 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

Indepth 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%
Debttoasset 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 fattails (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%
Indepth 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 NonCurrent Assets:
Total NonCurrent Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other NonCurrent 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 NonCash 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