Akamai Technologies provides cloud services for delivering, optimizing, and securing online content and business applications in the United States and internationally. The company was founded in 1998 and is based in Cambridge, Massachusetts.
AKAM Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Akamai Technologies Inc. To summarize, we found that Akamai Technologies Inc ranked in the 21th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 69.5%. In terms of the factors that were most noteworthy in this DCF analysis for AKAM, they are:
AKAM's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 30.81% of tickers in our DCF set.
Akamai Technologies Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 10.24. This coverage rate is greater than that of 78.2% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 8. This value is greater than merely 18.67% stocks in the Technology sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Akamai Technologies Inc? See APPF, HPQ, INTU, JKHY, and MELI.
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Kayode Omotosho on Seeking Alpha | August 25, 2020
CAMBRIDGE, Mass., Aug. 3, 2020 /PRNewswire/ -- Akamai Technologies, Inc. (NASDAQ: AKAM), the intelligent edge platform for securing and delivering digital experiences, announced today that it has joined The Massachusetts Technology Leadership Council ("MassTLC") Tech Compact for Social…