Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, AKAM's share price has jumped by 77.18%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- AKAM's revenue growth trails the industry average of 36.1%. Since the same quarter one year prior, revenues rose by 19.6%. 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.
- AKAM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.24, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $149.55 million or 33.71% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.51%.
Akamai Technologies, Inc. provides content delivery and cloud infrastructure services for accelerating and improving applications over the Internet in the United States and internationally. The company has a P/E ratio of 37.6, above the average internet industry P/E ratio of 37.2 and above the S&P 500 P/E ratio of 17.7. Akamai has a market cap of $6.86 billion and is part of the
industry. Shares are up 20.2% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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