Akamai Technologies Inc

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AKAM : NASDAQ : Technology
$50.95 up 0.08 | 0.16%
Today's Range: 50.51 - 50.93
Avg. Daily Volume: 2746300.0
06/27/17 - 10:20 AM ET

Financial Analysis


AKAMAI TECHNOLOGIES INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. AKAMAI TECHNOLOGIES INC is extremely liquid. Currently, the Quick Ratio is 3.26 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.65% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)609.24567.73
EBITDA ($mil)201.55201.53
EBIT ($mil)115.02120.86
Net Income ($mil)80.9374.86


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)845.07837.87
Total Assets ($mil)4450.04183.75
Total Debt ($mil)645.72623.49
Equity ($mil)3258.553113.58


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin79.276.01
EBITDA Margin33.0835.49
Operating Margin18.8821.29
Sales Turnover0.540.54
Return on Assets7.247.61
Return on Equity9.8810.22
Debt Q1 FY17 Q1 FY16
Current Ratio3.663.99
Debt/Capital0.170.17
Interest Expense5.635.44
Interest Coverage20.4222.22


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)173.19176.05
Div / share0.00.0
EPS0.460.42
Book value / share18.8217.69
Institutional Own % n/a n/a
Avg Daily Volume2665626.01805342.0

Valuation


HOLD. The current P/E ratio indicates a significant discount compared to an average of 39.16 for the Internet Software & Services industry and a value on par with the S&P 500 average of 25.75. To use another comparison, its price-to-book ratio of 2.66 indicates a discount versus the S&P 500 average of 3.09 and a significant discount versus the industry average of 6.22. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, AKAMAI TECHNOLOGIES INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AKAM 27.33 Peers 39.16   AKAM 10.55 Peers 26.04

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

AKAM is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AKAM is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AKAM 17.37 Peers 19.14   AKAM 0.63 Peers 0.38

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

AKAM is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AKAM trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AKAM 2.66 Peers 6.22   AKAM 3.38 Peers 39.46

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AKAM is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AKAM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AKAM 3.64 Peers 10.13   AKAM 6.38 Peers 31.48

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AKAM is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

AKAM significantly trails its peers on the basis of sales growth

 

 

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