Akamai Technologies, Inc.
Akamai Technologies, Inc. Fundamental Analysis
Akamai Technologies, Inc. (AKAM) shows weak financial fundamentals with a PE ratio of 30.05, profit margin of 10.74%, and ROE of 9.64%. The company generates $4.2B in annual revenue with moderate year-over-year growth of 4.70%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 48.3/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze AKAM's fundamental strength across five key dimensions:
Efficiency Score
WeakAKAM struggles to generate sufficient returns from assets.
Valuation Score
ModerateAKAM shows balanced valuation metrics.
Growth Score
WeakAKAM faces weak or negative growth trends.
Financial Health Score
ModerateAKAM shows balanced financial health with some risks.
Profitability Score
WeakAKAM struggles to sustain strong margins.
Key Financial Metrics
Is AKAM Expensive or Cheap?
P/E Ratio
AKAM trades at 30.05 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, AKAM's PEG of -3.05 indicates potential undervaluation.
Price to Book
The market values Akamai Technologies, Inc. at 2.73 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.52 times EBITDA. This is generally considered low.
How Well Does AKAM Make Money?
Net Profit Margin
For every $100 in sales, Akamai Technologies, Inc. keeps $10.74 as profit after all expenses.
Operating Margin
Core operations generate 13.47 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.64 in profit for every $100 of shareholder equity.
ROA
Akamai Technologies, Inc. generates $3.94 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Akamai Technologies, Inc. generates strong operating cash flow of $1.51B, reflecting robust business health.
Free Cash Flow
Akamai Technologies, Inc. generates strong free cash flow of $697.53M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.85 in free cash annually.
FCF Yield
AKAM converts 5.16% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
30.05
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-3.05
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.73
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.22
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.14
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.36
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How AKAM Stacks Against Its Sector Peers
| Metric | AKAM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 30.05 | 35.19 | Better (Cheaper) |
| ROE | 9.64% | 1155.00% | Weak |
| Net Margin | 10.74% | -127067.00% (disorted) | Strong |
| Debt/Equity | 1.14 | 0.41 | Weak (High Leverage) |
| Current Ratio | 2.36 | 4.71 | Strong Liquidity |
| ROA | 3.94% | -314918.00% (disorted) | Weak |
AKAM outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Akamai Technologies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
48.24%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
13.52%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
54.28%
Industry Style: Growth, Innovation, High Beta
High Growth