NEW YORK (TheStreet) -- JMP Securities upgraded Akamai Technologies (AKAM) - Get Akamai Technologies, Inc. Report to "market outperform" from "market perform" on Friday, setting an $85 price target on the content delivery network (CDN) provider.
Shares of Akamai were gaining 0.1% to $70.58 at the start of trading today.
The analyst firm maintained its 2015 and 2016 EPS estimates of $2.40 and $3.36 a share, respectively, for the company. JMP established its 2017 EPS estimates for Akamai at $3.36 a share.
JMP analysts Greg McDowell and Rishi Jaluria said "now is a compelling time to buy" Akamai stock as shares of the company are down from their May 4th high.
"Akamai is the leading CDN vendor, with an estimated 55% market share, and our recent market analysis suggests that its market share may be even higher in the Fortune 500," the analysts wrote.
"Additionally, we believe Akamai is well-positioned to take advantage of the burgeoning OTT (over-the-top) video viewing trend (which could be material to its business), the company has expanded its TAM significantly (especially in the area of security), and with expectations slightly reset on the last earnings call, we believe Akamai is in a good position to exceed estimates," the analysts continued.
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 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 19.45%.
- 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