NEW YORK (TheStreet) -- Akamai Technologies (AKAM) shares are down 0.10% to $76.35 on Monday and the cloud computing service provider is the subject of today's Trifecta Stocks 'Chart of the Day'.
Trifecta Stocks' Bryan Ashenberg and Bob Lang praised the company's resilience in today's analysis, noting that Akamai was able to transform itself into a profitable company after surviving a period of extreme valuation and eventual decline.
The days of volatility may be behind the Cambridge, MA-based company as its stock trades at its highest point in over a decade.
Back in the dotcom days, this technology solutions company's stock roared then crashed and burned, but to its credit, Akamai was one of the survivors of an extreme valuation period.
They have transformed their business to be profitable, something nearly unachievable in a prior time.
Today, we see Akamai trading near multi-year highs, and the recent earnings gap down was filled in nicely last week.
The volume on the sell day post earnings was high but that was likely hot money leaving the stock.
The indicators are lined up now for a strong buy signal on Moving Average Convergence Divergence (arrow) and follow- through on the %R oscillator, a momentum indicator measuring overbought and oversold levels. Relative Strength has been impressive.
- Bryan Ashenberg and Bob Lang, "Chart of the Day: AKAM," originally published 5/11/15 on TrifectaStocks.com
Jim Cramer, portfolio manager of the Action Alerts PLUS Charitable Trust, believes that the company's cyber security division is under the radar and could provide hidden value in the future.
"This company has a killer cyber security division that no one is focused on, yet that could help continue to propel the company's stock higher," said Cramer
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, growth in earnings per share, increase in net income and expanding profit margins. 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:
- The revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 16.1%. 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 0.20 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.97, which clearly demonstrates the ability to cover short-term cash needs.
- AKAMAI TECHNOLOGIES INC has improved earnings per share by 7.5% 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 $1.84 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($2.52 versus $1.84).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Internet Software & Services industry average. The net income increased by 6.8% when compared to the same quarter one year prior, going from $72.80 million to $77.75 million.
- The gross profit margin for AKAMAI TECHNOLOGIES INC is currently very high, coming in at 79.94%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.76% trails the industry average.
- You can view the full analysis from the report here: AKAM Ratings Report