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:
We started the process of determining a valid price forecast for Akamai Technologies Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Akamai Technologies Inc ranked in the 23th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. 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 28.33% 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 78.29% 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 only 16.11% stocks in the Technology sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
APPF, INTU, PAYC, IEHC, and VECO can be thought of as valuation peers to AKAM, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
Source: Glassdoor Ping Identity Holding Corp. (PING) has the potential to outperform. The market continues to discount execution worries and pressure from competitors. New growth bets are promising. New integrations will also drive product visibility. Ping's improved leverage ratios also make the company more attractive. The current valuation represents a...
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…