AKAMAI TECHNOLOGIES INC (AKAM)
US00971T1016 - Common Stock
Overall AKAM gets a fundamental rating of 5 out of 10. We evaluated AKAM against 86 industry peers in the IT Services industry. While AKAM has a great profitability rating, there are some minor concerns on its financial health. AKAM has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
AKAM had positive earnings in the past year.
In the past year AKAM had a positive cash flow from operations.
In the past 5 years AKAM has always been profitable.
AKAM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 5.53%, AKAM is doing good in the industry, outperforming 70.24% of the companies in the same industry.
Looking at the Return On Equity, with a value of 11.91%, AKAM is in the better half of the industry, outperforming 72.62% of the companies in the same industry.
AKAM has a better Return On Invested Capital (6.87%) than 64.29% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AKAM is below the industry average of 12.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.53% | ||
| ROE | 11.91% | ||
| ROIC | 6.87% |
ROA(3y)6.61%
ROA(5y)6.77%
ROE(3y)12.77%
ROE(5y)12.9%
ROIC(3y)7.91%
ROIC(5y)7.94%
1.3 Margins
With an excellent Profit Margin value of 14.36%, AKAM belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
In the last couple of years the Profit Margin of AKAM has grown nicely.
AKAM has a Operating Margin of 19.88%. This is amongst the best in the industry. AKAM outperforms 94.05% of its industry peers.
AKAM's Operating Margin has improved in the last couple of years.
AKAM has a Gross Margin of 60.44%. This is in the better half of the industry: AKAM outperforms 78.57% of its industry peers.
In the last couple of years the Gross Margin of AKAM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.88% | ||
| PM (TTM) | 14.36% | ||
| GM | 60.44% |
OM growth 3Y-4.14%
OM growth 5Y2.97%
PM growth 3Y-6.22%
PM growth 5Y5.5%
GM growth 3Y-2.19%
GM growth 5Y-1.4%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AKAM is destroying value.
AKAM has less shares outstanding than it did 1 year ago.
AKAM has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, AKAM has a worse debt to assets ratio.
2.2 Solvency
AKAM has an Altman-Z score of 2.85. This is not the best score and indicates that AKAM is in the grey zone with still only limited risk for bankruptcy at the moment.
AKAM's Altman-Z score of 2.85 is in line compared to the rest of the industry. AKAM outperforms 58.33% of its industry peers.
AKAM has a debt to FCF ratio of 7.11. This is a slightly negative value and a sign of low solvency as AKAM would need 7.11 years to pay back of all of its debts.
AKAM has a Debt to FCF ratio (7.11) which is comparable to the rest of the industry.
AKAM has a Debt/Equity ratio of 0.77. This is a neutral value indicating AKAM is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.77, AKAM is in line with its industry, outperforming 41.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 7.11 | ||
| Altman-Z | 2.85 |
ROIC/WACC0.68
WACC10.05%
2.3 Liquidity
A Current Ratio of 2.16 indicates that AKAM has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.16, AKAM is doing good in the industry, outperforming 69.05% of the companies in the same industry.
A Quick Ratio of 2.16 indicates that AKAM has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.16, AKAM is in the better half of the industry, outperforming 69.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.16 | ||
| Quick Ratio | 2.16 |
3. Growth
3.1 Past
AKAM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.64%, which is quite good.
Measured over the past years, AKAM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.34% on average per year.
The Revenue has been growing slightly by 5.40% in the past year.
The Revenue has been growing slightly by 7.03% on average over the past years.
EPS 1Y (TTM)15.64%
EPS 3Y5.96%
EPS 5Y11.34%
EPS growth Q2Q23.36%
Revenue 1Y (TTM)5.4%
Revenue growth 3Y6.03%
Revenue growth 5Y7.03%
Revenue growth Q2Q7.24%
3.2 Future
AKAM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.78% yearly.
The Revenue is expected to grow by 8.66% on average over the next years. This is quite good.
EPS Next Y10.51%
EPS Next 2Y9.76%
EPS Next 3Y9.27%
EPS Next 5Y10.78%
Revenue Next Year6.94%
Revenue Next 2Y7.26%
Revenue Next 3Y7.14%
Revenue Next 5Y8.66%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.39, the valuation of AKAM can be described as correct.
Based on the Price/Earnings ratio, AKAM is valued a bit cheaper than 73.81% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.20. AKAM is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 14.83, which indicates a correct valuation of AKAM.
Based on the Price/Forward Earnings ratio, AKAM is valued a bit cheaper than 79.76% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.60, AKAM is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.39 | ||
| Fwd PE | 14.83 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AKAM indicates a somewhat cheap valuation: AKAM is cheaper than 60.71% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AKAM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.96 | ||
| EV/EBITDA | 13.32 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AKAM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.56
PEG (5Y)1.45
EPS Next 2Y9.76%
EPS Next 3Y9.27%
5. Dividend
5.1 Amount
AKAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
AKAMAI TECHNOLOGIES INC
NASDAQ:AKAM (4/23/2024, 7:00:00 PM)
After market: 101.76 0 (0%)101.76
+0.88 (+0.87%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
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Market Cap15.40B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.39 | ||
| Fwd PE | 14.83 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
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FCF(TTM)
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OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.56
PEG (5Y)1.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.53% | ||
| ROE | 11.91% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.88% | ||
| PM (TTM) | 14.36% | ||
| GM | 60.44% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.16 | ||
| Quick Ratio | 2.16 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)15.64%
EPS 3Y5.96%
EPS 5Y
EPS growth Q2Q
EPS Next Y10.51%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.4%
Revenue growth 3Y6.03%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
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EBIT growth 3Y
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