Financial Comparison: Akamai Technologies (AKAM) & Its Peers

Akamai Technologies (NASDAQ:AKAM) is one of 271 public companies in the “IT Services” industry, but how does it contrast to its peers? We will compare Akamai Technologies to similar businesses based on the strength of its valuation, analyst recommendations, earnings, dividends, risk, profitability and institutional ownership.

Analyst Ratings

This is a summary of recent ratings for Akamai Technologies and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Akamai Technologies	2	9	13	1	2.52
Akamai Technologies Competitors	1992	5655	9477	342	2.47

Akamai Technologies presently has a consensus target price of $137.82, indicating a potential upside of 69.21%. As a group, “IT Services” companies have a potential upside of 28.42%. Given Akamai Technologies’ stronger consensus rating and higher possible upside, equities analysts clearly believe Akamai Technologies is more favorable than its peers.

Insider & Institutional Ownership

94.3% of Akamai Technologies shares are owned by institutional investors. Comparatively, 36.4% of shares of all “IT Services” companies are owned by institutional investors. 2.3% of Akamai Technologies shares are owned by company insiders. Comparatively, 20.4% of shares of all “IT Services” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Akamai Technologies and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Akamai Technologies	8.84%	10.88%	4.01%
Akamai Technologies Competitors	-189.78%	-32.45%	-8.29%

Risk & Volatility

Akamai Technologies has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Akamai Technologies’ peers have a beta of 2.16, suggesting that their average share price is 116% more volatile than the S&P 500.

Valuation & Earnings

This table compares Akamai Technologies and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Akamai Technologies	$4.32 billion	$452.03 million	31.57
Akamai Technologies Competitors	$8.87 billion	$227.06 million	-26.79

Akamai Technologies’ peers have higher revenue, but lower earnings than Akamai Technologies. Akamai Technologies is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Akamai Technologies beats its peers on 9 of the 13 factors compared.

About Akamai Technologies

Akamai Technologies, Inc. provides cloud computing, security, and content delivery services in the United States and internationally. The company offers cloud solutions to keep infrastructure, websites, applications, application programming interfaces, and users safe from various cyberattacks and online threats while enhancing performance. It also provides web and mobile performance solutions to enable dynamic websites and applications; media delivery solutions, including video streaming and video player services, game and software delivery, broadcast operations, authoritative domain name system, resolution, and data and analytics; and cloud computing services, such as compute, storage, networking, database, and container management services to build, deploy, and secure applications and workloads. In addition, the company offers content delivery solutions; and an array of service and support to assist customers with integrating, configuring, optimizing, and managing its offerings. It sells its solutions through various channel partners. Akamai Technologies, Inc. was incorporated in 1998 and is headquartered in Cambridge, Massachusetts.