NEW YORK (TheStreet) -- Akamai Technologies (AKAM) shares are flat at $61.97 in early market trading on Thursday after analysts at Pacific Crest set a $65 price target on the company's shares.
The firm believes that the the cloud infrastructure services provider will experience strong momentum in near term and while seeing limited risk from Apple (AAPL) as a rival.
"There have been numerous reports that Apple, which we estimate is a mid- to higher-single-digit percentage of revenue for Akamai, has built a CDN. Based on our initial industry checks, we believe the loss of Apple-related business is low. Our contacts didn't expect Apple to take its content delivery completely in-house and thought the current agreement with Akamai would continue unchanged," said the firm.
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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AKAM's revenue growth has slightly outpaced the industry average of 19.9%. Since the same quarter one year prior, revenues rose by 25.9%. 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 3.82, which clearly demonstrates the ability to cover short-term cash needs.
- AKAMAI TECHNOLOGIES INC has improved earnings per share by 17.6% 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 ($2.35 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 17.8% when compared to the same quarter one year prior, going from $61.90 million to $72.89 million.
- Net operating cash flow has significantly increased by 54.34% to $200.22 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.66%.
- You can view the full analysis from the report here: AKAM Ratings Report
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