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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Akamai Technologies, Inc. (XNAS:AKAM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AKAM
Name:
AKAMAI TECHNOLOGIES, INC. (XNAS:AKAM)
Sector:
91.09M
Industry:
Software�Infrastructure
CEO:
Dr. F. Thomson Leighton
Total Employees:
8,700
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -91.40% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AKAMAI TECHNOLOGIES, INC.(AKAM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
88.26
One Month Price Target:
$88.59
Six Month Price Target :
$90.22
Likely Price in One Year's Time:
Ticker:
$92.18
Likely Trading Range Today Under (Normal Volatility)
$87.99
Price Upper limit ($) :
$88.58
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$84.69
This week:
$80.28
This month :
$72.31
Other Primary facts
Market Cap:
14.03B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
158.96M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
9.8%
-10.91%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$104.82
$97.24
$71.70
$79.28
Medium risk (<10%) entry points
Buy Call
Sell Call
$94.77
Buy Put:
Sell Put:
$93.15
$81.73
$83.37
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AKAM
Sharpe Ratio:
0.93%
Comparison:
AKAM, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -43.18% lower than the industry
& is -59.24% lower than the market/S&P 500 average
Average Returns/Yield of
AKAM
Daily returns:
0.03%
Weekly returns:
0.14%
Monthly returns:
0.55%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is -54.52% below industry average
Classification:
AKAM, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
AKAM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.98%
Weekly Volatility:
4.43%
Monthly Volatility:
8.86%
Yearly Volatility:
30.69%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.06%
Volatility in last five trading days has been -46.46% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.04%
Weekly VaR:
-9.04%
Monthly VaR:
-18.08%
How Much Can the price of
AKAM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-62.61%
This translates to price declining to:
$74.43
This translates to price declining to:
$33.00
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
AKAM is a 27.57% riskier investment compared to the market/S&P 500 & is 9.29% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -40.54% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AKAM
Beta in relation to market/S&P 500--0.66
Expected beta in 1 year's time:
0.492
Expected beta in 3 year's time:
0.696
Unlevered (debt free) Beta:
0.41
Beta in relation to Nasdaq (XNAS):
0.577
Beta in relation to all global stocks::
0.447
Beta Comparison & Analysis
Beta of competitors/peers::
1.498
Beta is -55.89% lower than peers
Average Industry Beta:
1.112
Beta is -40.56% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
13.71%
Sustainable growth rate is -96.29% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.011
Alpha is -131.38% below industry average alpha yield
Alpha is -72% below the market average
Analysis of Cost of Capital of
AKAM
Equity cost of capital:
0.077
Equity cost of capital is -28.69% below industry mean WACC
Unlevered (without debt) cost of capital:
4.76%
Before-tax cost of debt:
1.77%
After-tax cost of debt:
1.40%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.40%
WACC is -30.68% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$22.16
Revenue growth rate per share of (3Y):
3.26
Annual revenue growth rate is -57.09% below industry average
EPS:
$3.72
Expected Annual growth rate of EPS (3Y):
10.16%
Expected future EPS growth rate is -66.28% lower than the Software�Infrastructure industry
Free cash flow (FCF) per share:
$5.35
-
-
Debt per share
$18.78
EBITDA per share
$8.30
Valuation Analysis Today of
AKAM
P/E Ratio:
25.1
P/E Ratio of Competitors/Peers:
262.06
P/E ratio is -90.42% lower than main peers & is -61.53% lower than the industry
Stock price/value with industry average P/E ratio: $242.68
AKAM is -63.63% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.98
Price to sales ratio is -63.73% below the industry mean
P/B (Price to book value ratio):
3.26
Price to free cash flow: 16.51
Price to free cash flow ratio is -51.63% lower than the industry
Net income growth rate (3Y):
124.88%
Net income growth rate is -98.53% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
69.42%
Net debt to equity ratio:
66.65%
Debt to assets ratio:
35.95%
Net debt to assets ratio:
34.52%
Debt-to-asset ratio is -48.44% below industry average
Ability to repay debt:
Interest coverage ratio:
22.98
Interest coverage ratio is -110.89% less than industry average
Looking forward:
Debt growth rate:
38.68%
Annual debt growth is -64% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.511
Statistical significance of correlation:
AKAM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is 6.56% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
-0.015
Covariance of price movement with the market:
-0.017
Kurtosis
5.454
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.657
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
AKAM
Gross Profit Margin Ratio:
253%
Operating Profit Margin Ratio:
21.98%
Operating profit margin is -285.18% lower than the industry
Net Profit Margin Ratio:
253%
Effective Tax Rate:
11.75%
Effective tax rate is -62.48% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
14.30%
Return on equity (ROE) is -86.60% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.41%
Return on assets (ROA) is -295.61% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
1.68
Current ratio is -27.63% below industry average
Cash Conversion Cycle (days):
39.7
Cash conversion cycle is -64.77% below industry average
The remaining useful life of property plant & equipment is: 8.4 years
Stock based compensation to net income ratio:
9.14%
In-depth Efficiency Analysis
Revenue generated per employee:
404.8K
Each employee generates 3% more revenue than industry average revenue per employee
EBITDA generated per employee:
151.6K
Each employee generates 132% more EBITDA than industry average revenue per employee
Profit generated per employee:
70.7K
Each employee generates 238% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
10.5K
Each employee generates -47% less free cash flow than industry average revenue per employee
Assets/Capital per employee
786.1K
Each employee generates -47% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 24.53%
Growth rate in R&D investment/expenditure is -1045.90% lower than the industry
Competitors/Peer firms of
AKAM
NICE LTD (XNAS:NICE)
ENTEGRIS, INC. (XNAS:ENTG)
CONFLUENT, INC. (XNAS:CFLT)
NUANCE COMMUNICATIONS, INC. (XNAS:NUAN)
QORVO, INC. (XNAS:QRVO)
SABRP
QUALTRICS INTERNATIONAL INC. (XNAS:XM)
ENPHASE ENERGY, INC. (XNAS:ENPH)
TRIMBLE INC. (XNAS:TRMB)
Current Analyst Ratings
Strong buy�17%
Buy�29%
Hold�54%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.52B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.30B
2.23B
353.26M
462.69M
931.02M
468.33M
133.25M
1.42B
11.04M
57.40M
561.76M
1.32B
774.10M
615.11M
720.78M
84.72M
615.11M
Statement of Cash Flow
Date:
Period:
142.60M
Differed Income Tax :
- 13579.00K
Stock Based Compensation :
56.23M
Change in Working Capital :
- 112208.00K
Accounts Receivables:
- 39198.00K
Other Working Capital:
60.06M
Other Non-Cash Items:
30.25M
Net Cash Provided by Operating Activities:
222.45M
Investments in PP&E:
- 51005.00K
Net Acquisitions:
- 872099.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
377.81M
129.06M
506.87M
718.79M
-
238.82M
1.46B
2.40B
2.75B
512.19M
786.71M
265.95M
128.86M
6.84B
-
8.30B
122.93M
258.76M
-
139.73M
347.84M
869.27M
2.99B
77.23M
3.13B
-
4.00B
1.62M
1.52B
- 88611.0K
2.87B
March 31, 2022 at 6:00:00 AM
2.71B
4.30B
8.30B
915.77M
3.24B
2.9B
691.80M
- 85596.00K
- 316898.00K
-
-
- 102853.00K
-
42.02M
- 60835.00K
- 1462.00K
- 156744.00K
381.01M
537.75M
222.45M
- 131359.00K
91.09M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
AKAM
2023
2024
2025
2026
2027
$92.64
$96.75
$101.05
$105.54
$110.22