It is Poised to be a Bull Market for Akamai Technologies Inc. (AKAM)

Akamai Technologies Inc. (NASDAQ: AKAM) stock jumped 0.22% on Friday to $96.21 against a previous-day closing price of $96.00. With 1.02 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.9 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $96.85 whereas the lowest price it dropped to was $95.65. The 52-week range on AKAM shows that it touched its highest point at $123.25 and its lowest point at $85.90 during that stretch. It currently has a 1-year price target of $119.92. Beta for the stock currently stands at 0.64.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AKAM was up-trending over the past week, with a rise of 1.72%, but this was up by 4.28% over a month. Three-month performance dropped to -6.38% while six-month performance fell -16.93%. The stock lost -14.41% in the past year, while it has lost -17.80% so far this year. A look at the trailing 12-month EPS for AKAM yields 3.72 with Next year EPS estimates of 6.04. For the next quarter, that number is 1.31. This implies an EPS growth rate of 16.60% for this year and 12.26% for next year. EPS is expected to grow by 10.66% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 16.60%.

Float and Shares Shorts:

At present, 160.49 million AKAM shares are outstanding with a float of 157.60 million shares on hand for trading. On Jul 14, 2022, short shares totaled 11.67 million, which was 7.28% higher than short shares on Jun 14, 2022. In addition to Dr. F. Thomson Leighton as the firm’s Co-Founder, CEO & Director, Mr. Edward J. McGowan serves as its Exec. VP, CFO, Treasurer & Principal Financial Officer.

Institutional Ownership:

Through their ownership of 97.48% of AKAM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 54.50% of AKAM, in contrast to 43.30% held by mutual funds. Shares owned by individuals account for 2.70%. As the largest shareholder in AKAM with 10.76% of the stake, The Vanguard Group, Inc. holds 17,246,501 shares worth 17,246,501. A second-largest stockholder of AKAM, BlackRock Fund Advisors, holds 10,180,959 shares, controlling over 6.35% of the firm’s shares. Canada Pension Plan Investment Bo is the third largest shareholder in AKAM, holding 7,375,349 shares or 4.60% stake. With a 4.60% stake in AKAM, the Canada Pension Plan is the largest stakeholder. A total of 7,375,000 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.95% of AKAM stock, is the second-largest Mutual Fund holder. It holds 4,723,850 shares valued at 431.43 million. Vanguard Mid Cap Index Fund holds 2.30% of the stake in AKAM, owning 3,690,949 shares worth 337.09 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, AKAM reported revenue of $903.65M and operating income of $191.95M. Over the past year, revenue came in at $3.52B while operating income stood at $774.10M. It generated $119.16M net income for the quarter, which came to $615.11M over the last twelve months. The EBITDA in the recently reported quarter was $324.98M and diluted EPS was $0.73. EBITDA for the full year was $1.38B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AKAM since 20 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With AKAM analysts setting a high price target of $164.00 and a low target of $90.00, the average target price over the next 12 months is $115.79. Based on these targets, AKAM could surge 70.46% to reach the target high and fall by -6.45% to reach the target low. Reaching the average price target will result in a growth of 20.35% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. AKAM will report FY 2022 earnings on 02/07/2023. Analysts have provided yearly estimates in a range of $5.43 being high and $5.25 being low. For AKAM, this leads to a yearly average estimate of $5.37. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Akamai Technologies Inc. surprised analysts by -$0.03 when it reported $1.39 EPS against a consensus estimate of $1.42. The surprise factor in the prior quarter was $0.07. Based on analyst estimates, the high estimate for the next quarter is $1.33 and the low estimate is $1.28. The average estimate for the next quarter is thus $1.31.

Summary of Insider Activity:

Insiders traded AKAM stock several times over the past three months with 16 Buys and 7 Sells. In these transactions, 23,077 shares were bought while 18,147 shares were sold. The number of buy transactions has increased to 100 while that of sell transactions has risen to 91 over the past year. The total number of shares bought during that period was 451,925 while 281,690 shares were sold.

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