NEW YORK (TheStreet) -- Analysts at D.A. Davidson raised their price target and introduced earnings estimates on Akamai Technologies Inc. (AKAM) - Get Akamai Technologies Inc. Report on Wednesday morning.
The firm increased its price target on the content delivery and cloud infrastructure services provider to $86 from $72.
For full year 2016 D.A. Davidson is introducing a revenue estimate of $2.68 billion, an 18% year-over-year growth rate, and earnings of $3.27 per share, a 20% increase from its 2015 earnings estimate.
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The firm increased its numbers on Akamai as it is expecting higher operating leverage.
"We view the company's technology as significantly differentiated in the market, both on the CDN side of the business and on the security and performance side. The company's ability to deploy capabilities at the edge of the network is one such differentiator. We believe its strong balance sheet and solid cash flow generation also offer it a competitive advantage in the market," D.A. Davidson said.
The firm maintained its "buy" rating on the stock.
Separately, TheStreet Ratings team rates AKAMAI TECHNOLOGIES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AKAMAI TECHNOLOGIES INC (AKAM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AKAMAI TECHNOLOGIES INC has improved earnings per share by 13.6% in the most recent quarter compared to the same quarter a year ago. 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 ($2.42 versus $1.61).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet Software & Services industry average. The net income increased by 14.3% when compared to the same quarter one year prior, going from $79.76 million to $91.16 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 28.8%. Since the same quarter one year prior, revenues rose by 25.8%. 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 0.21 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.44, which clearly demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: AKAM Ratings Report