Akamai is a cloud services provider that gives customers a network of servers to distribute content. The company has served Apple (AAPL) - Get Apple Inc. (AAPL) Report, Facebook (FB) - Get Facebook, Inc. Class A Report, Twitter (TWTR) - Get Twitter, Inc. Report and eBay (EBAY) - Get eBay Inc. Report.
Deutsche Bank recommends Akamai as a large cap GARP play among television.
"Big Picture, we see a +$500M a year opportunity for AKAM, as the Long Tail (NBC, CBS, HBO, ESPN, AAPL Internet TV, DISH, Comcast, HULU, etc) generate the next +10% of Internet Video traffic (above and beyond NFLX's +37% of Internet traffic volumes)," the firm said in a note.
The firm's scenario calls for Akamai's business to grow in the high teens, above the consensus view of mid-teens.
Shares of Akamai were down 0.64% to $71.44 at close on Monday.
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 several positive factors, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AKAM's revenue growth has slightly outpaced the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 13.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although AKAM's debt-to-equity ratio of 0.20 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 2.83, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $264.02 million or 31.86% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.34%.
- AKAMAI TECHNOLOGIES INC's earnings per share declined by 7.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AKAMAI TECHNOLOGIES INC increased its bottom line by earning $1.84 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus $1.84).
- You can view the full analysis from the report here: AKAM Ratings Report