NEW YORK (TheStreet) -- Shares of Akamai Technologies Inc. (AKAM - Get Report) are higher by 1.59% to $54.15 in pre-market trading on Wednesday after the company's rating was upgraded to "outperform" from "sector perform" at Pacific Crest.
The firm said it upped its rating for the content delivery and cloud infrastructure services provider as the company continues to see growth in its media traffic.
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Separately, TheStreet Ratings team rates AKAMAI TECHNOLOGIES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate AKAMAI TECHNOLOGIES INC (AKAM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AKAM's revenue growth has slightly outpaced the industry average of 21.3%. Since the same quarter one year prior, revenues rose by 23.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although AKAM's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.10, which clearly demonstrates the ability to cover short-term cash needs.
- AKAMAI TECHNOLOGIES INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AKAMAI TECHNOLOGIES INC increased its bottom line by earning $1.61 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $1.61).
- The gross profit margin for AKAMAI TECHNOLOGIES INC is currently very high, coming in at 79.51%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.05% trails the industry average.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: AKAM Ratings Report