AKAMAI TECHNOLOGIES INC (AKAM) Stock Fundamental Analysis
NASDAQ:AKAM - Nasdaq - US00971T1016 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to AKAM. AKAM was compared to 82 industry peers in the IT Services industry. Both the profitability and the financial health of AKAM get a neutral evaluation. Nothing too spectacular is happening here. AKAM has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year AKAM was profitable.
AKAM had a positive operating cash flow in the past year.
AKAM had positive earnings in each of the past 5 years.
Each year in the past 5 years AKAM had a positive operating cash flow.
1.2 Ratios
AKAM has a better Return On Assets (4.53%) than 63.41% of its industry peers.
AKAM has a Return On Equity of 9.87%. This is in the better half of the industry: AKAM outperforms 62.20% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.35%, AKAM is in the better half of the industry, outperforming 64.63% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AKAM is significantly below the industry average of 22.63%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.53% | ||
| ROE | 9.87% | ||
| ROIC | 7.35% |
ROA(3y)5.57%
ROA(5y)6.38%
ROE(3y)11.42%
ROE(5y)12.35%
ROIC(3y)7.45%
ROIC(5y)8.08%
1.3 Margins
AKAM has a better Profit Margin (11.26%) than 80.49% of its industry peers.
AKAM's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 17.16%, AKAM belongs to the best of the industry, outperforming 91.46% of the companies in the same industry.
In the last couple of years the Operating Margin of AKAM has declined.
AKAM has a Gross Margin of 59.07%. This is in the better half of the industry: AKAM outperforms 78.05% of its industry peers.
In the last couple of years the Gross Margin of AKAM has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.16% | ||
| PM (TTM) | 11.26% | ||
| GM | 59.07% |
OM growth 3Y-8.94%
OM growth 5Y-2.49%
PM growth 3Y-12.41%
PM growth 5Y-5.2%
GM growth 3Y-2.12%
GM growth 5Y-2.05%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AKAM is destroying value.
AKAM has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, AKAM has less shares outstanding
Compared to 1 year ago, AKAM has an improved debt to assets ratio.
2.2 Solvency
AKAM has an Altman-Z score of 2.37. 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 2.37 is in line compared to the rest of the industry. AKAM outperforms 47.56% of its industry peers.
The Debt to FCF ratio of AKAM is 6.47, which is on the high side as it means it would take AKAM, 6.47 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 6.47, AKAM perfoms like the industry average, outperforming 45.12% of the companies in the same industry.
A Debt/Equity ratio of 0.52 indicates that AKAM is somewhat dependend on debt financing.
AKAM has a Debt to Equity ratio (0.52) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 6.47 | ||
| Altman-Z | 2.37 |
ROIC/WACC0.88
WACC8.39%
2.3 Liquidity
AKAM has a Current Ratio of 1.18. This is a normal value and indicates that AKAM is financially healthy and should not expect problems in meeting its short term obligations.
AKAM has a Current ratio of 1.18. This is in the lower half of the industry: AKAM underperforms 67.07% of its industry peers.
AKAM has a Quick Ratio of 1.18. This is a normal value and indicates that AKAM is financially healthy and should not expect problems in meeting its short term obligations.
AKAM has a worse Quick ratio (1.18) than 65.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
AKAM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.24%.
Measured over the past 5 years, AKAM shows a small growth in Earnings Per Share. The EPS has been growing by 7.53% on average per year.
Looking at the last year, AKAM shows a small growth in Revenue. The Revenue has grown by 3.51% in the last year.
Measured over the past years, AKAM shows a small growth in Revenue. The Revenue has been growing by 6.64% on average per year.
EPS 1Y (TTM)1.24%
EPS 3Y4.07%
EPS 5Y7.53%
EPS Q2Q%3.66%
Revenue 1Y (TTM)3.51%
Revenue growth 3Y4.86%
Revenue growth 5Y6.64%
Sales Q2Q%2.85%
3.2 Future
The Earnings Per Share is expected to grow by 9.78% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.48% on average over the next years.
EPS Next Y-0.74%
EPS Next 2Y2.32%
EPS Next 3Y5.09%
EPS Next 5Y9.78%
Revenue Next Year3.66%
Revenue Next 2Y4.42%
Revenue Next 3Y5.28%
Revenue Next 5Y7.48%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
AKAM is valuated reasonably with a Price/Earnings ratio of 11.70.
AKAM's Price/Earnings ratio is rather cheap when compared to the industry. AKAM is cheaper than 89.02% of the companies in the same industry.
When comparing the Price/Earnings ratio of AKAM to the average of the S&P500 Index (26.03), we can say AKAM is valued rather cheaply.
A Price/Forward Earnings ratio of 11.28 indicates a reasonable valuation of AKAM.
Based on the Price/Forward Earnings ratio, AKAM is valued cheaper than 86.59% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.94. AKAM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.7 | ||
| Fwd PE | 11.28 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AKAM is valued cheaper than 81.71% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, AKAM is valued a bit cheaper than 63.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.37 | ||
| EV/EBITDA | 9.83 |
4.3 Compensation for Growth
The decent profitability rating of AKAM may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.55
EPS Next 2Y2.32%
EPS Next 3Y5.09%
5. Dividend
5.1 Amount
No dividends for AKAM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
76.42
-1.07 (-1.38%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners98.09%
Inst Owner Change-4.82%
Ins Owners1.86%
Ins Owner Change7.2%
Market Cap11.17B
Analysts76
Price Target105.98 (38.68%)
Short Float %5%
Short Ratio3.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.95%
Min EPS beat(2)6.21%
Max EPS beat(2)7.7%
EPS beat(4)3
Avg EPS beat(4)3.28%
Min EPS beat(4)-1.88%
Max EPS beat(4)7.7%
EPS beat(8)7
Avg EPS beat(8)3.47%
EPS beat(12)11
Avg EPS beat(12)3.3%
EPS beat(16)14
Avg EPS beat(16)2.6%
Revenue beat(2)0
Avg Revenue beat(2)-1.54%
Min Revenue beat(2)-1.55%
Max Revenue beat(2)-1.54%
Revenue beat(4)0
Avg Revenue beat(4)-1.56%
Min Revenue beat(4)-1.73%
Max Revenue beat(4)-1.41%
Revenue beat(8)1
Avg Revenue beat(8)-1.44%
Revenue beat(12)2
Avg Revenue beat(12)-1.26%
Revenue beat(16)2
Avg Revenue beat(16)-1.28%
PT rev (1m)-2.76%
PT rev (3m)-10.25%
EPS NQ rev (1m)2.52%
EPS NQ rev (3m)-6.32%
EPS NY rev (1m)0.73%
EPS NY rev (3m)-7.74%
Revenue NQ rev (1m)0.87%
Revenue NQ rev (3m)-2.62%
Revenue NY rev (1m)0.38%
Revenue NY rev (3m)-3.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.7 | ||
| Fwd PE | 11.28 | ||
| P/S | 2.78 | ||
| P/FCF | 20.37 | ||
| P/OCF | 7.87 | ||
| P/B | 2.44 | ||
| P/tB | 15.37 | ||
| EV/EBITDA | 9.83 |
EPS(TTM)6.53
EY8.54%
EPS(NY)6.77
Fwd EY8.86%
FCF(TTM)3.75
FCFY4.91%
OCF(TTM)9.71
OCFY12.7%
SpS27.51
BVpS31.38
TBVpS4.97
PEG (NY)N/A
PEG (5Y)1.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.53% | ||
| ROE | 9.87% | ||
| ROCE | 8.66% | ||
| ROIC | 7.35% | ||
| ROICexc | 8.81% | ||
| ROICexgc | 21.01% | ||
| OM | 17.16% | ||
| PM (TTM) | 11.26% | ||
| GM | 59.07% | ||
| FCFM | 13.64% |
ROA(3y)5.57%
ROA(5y)6.38%
ROE(3y)11.42%
ROE(5y)12.35%
ROIC(3y)7.45%
ROIC(5y)8.08%
ROICexc(3y)8.74%
ROICexc(5y)9.5%
ROICexgc(3y)17.88%
ROICexgc(5y)17.4%
ROCE(3y)8.78%
ROCE(5y)9.53%
ROICexcg growth 3Y5.69%
ROICexcg growth 5Y5.39%
ROICexc growth 3Y-6.51%
ROICexc growth 5Y-2.76%
OM growth 3Y-8.94%
OM growth 5Y-2.49%
PM growth 3Y-12.41%
PM growth 5Y-5.2%
GM growth 3Y-2.12%
GM growth 5Y-2.05%
F-Score6
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.52 | ||
| Debt/FCF | 6.47 | ||
| Debt/EBITDA | 1.77 | ||
| Cap/Depr | 130.63% | ||
| Cap/Sales | 21.65% | ||
| Interest Coverage | 33.35 | ||
| Cash Conversion | 104.61% | ||
| Profit Quality | 121.11% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.18 | ||
| Altman-Z | 2.37 |
F-Score6
WACC8.39%
ROIC/WACC0.88
Cap/Depr(3y)117.53%
Cap/Depr(5y)122.44%
Cap/Sales(3y)18.5%
Cap/Sales(5y)19.05%
Profit Quality(3y)128.52%
Profit Quality(5y)119.53%
High Growth Momentum
Growth
EPS 1Y (TTM)1.24%
EPS 3Y4.07%
EPS 5Y7.53%
EPS Q2Q%3.66%
EPS Next Y-0.74%
EPS Next 2Y2.32%
EPS Next 3Y5.09%
EPS Next 5Y9.78%
Revenue 1Y (TTM)3.51%
Revenue growth 3Y4.86%
Revenue growth 5Y6.64%
Sales Q2Q%2.85%
Revenue Next Year3.66%
Revenue Next 2Y4.42%
Revenue Next 3Y5.28%
Revenue Next 5Y7.48%
EBIT growth 1Y-7.93%
EBIT growth 3Y-4.52%
EBIT growth 5Y3.99%
EBIT Next Year47.73%
EBIT Next 3Y19.38%
EBIT Next 5Y17.72%
FCF growth 1Y-25.58%
FCF growth 3Y-6.56%
FCF growth 5Y7.16%
OCF growth 1Y10.33%
OCF growth 3Y2.65%
OCF growth 5Y7.5%