Valued at $13.7 billion by market cap Cambridge, Massachusetts-based Akamai Technologies, Inc. (AKAM) provides cloud computing, security, and content delivery services in the United States and internationally. Akamai makes it easy for businesses to develop and run applications while keeping experiences closer to users and threats farther away.
The tech major is gearing up to announce its fourth-quarter results after the market closes on Thursday, Feb. 20. Ahead of the event, analysts expect Akamai to report a non-GAAP profit of $1.01 per share, down 14.4% from $1.18 per share reported in the year-ago quarter. While the company has matched Wall Street’s earnings projections once over the past four quarters, it has missed the estimates on three other occasions. Its adjusted EPS for the last reported quarter increased 7.1% year-over-year to $1.05 but missed the consensus estimates by 4.6%.
For the full fiscal 2024, Akamai is expected to deliver an adjusted EPS of $4.28, down 3.6% from $4.44 in fiscal 2023. While in fiscal 2025, its earnings are expected to rebound 7.5% year-over-year to $4.60 per share.
AKAM stock prices have declined 22.7% over the past 52 weeks, significantly underperforming the S&P 500 Index’s ($SPX) 26.5% surge and the Technology Select Sector SPDR Fund’s (XLK) 22.1% returns during the same time frame.
Akamai Technologies’ stock prices plummeted 14.4% in the trading session after the release of its Q3 results on Nov. 7 as the company missed Wall Street’s earnings expectations. Furthermore, its content delivery network revenues have continued to observe a decline and its Q4 guidance fell below Wall Street’s expectations. It reported a 15.9% year-over-year decline in Delivery revenues to $319.1 million, however, its Security and Compute segment revenues observed a substantial growth, which led to a 4.1% year-over-year growth in total revenues to over $1 billion, beating analysts’ estimates.
Meanwhile, it incurred a restructuring charge of $82 million during the quarter and observed notable increases in other operating expenses which led to a massive 59.9% year-over-year drop in operating income to $70.6 million.
However, analysts remain moderately bullish on the stock’s prospects. AKAM has a consensus “Moderate Buy” rating overall. Out of the 19 analysts covering the stock, 13 recommend “Strong Buy,” one advises “Moderate Buy,” four suggest “Hold,” and one advocates a “Strong Sell” rating. Its mean price target of $114.79 indicates a 26.1% upside potential from current price levels.
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