Akamai Earnings Preview: Analysts Expect Slower Growth

Akamai (AKAM) prepares to report Q1 earnings on May 8, 2025. Analysts anticipate a decline in EPS and slight revenue growth, indicating potential volatility in stock price. Historical performance post-earnings raises concerns for investors awaiting the results.

Date: 08-05-2025

AI Rating: 5

**Earnings and Revenue Insights**
Akamai (NASDAQ: AKAM) is set to report its Q1 earnings with analysts predicting an EPS of $1.57, marking a 4% decline from the previous year. In contrast, revenue is expected to rise by 2% to $1.01 billion, reflecting a slight improvement despite the drop in earnings. This discrepancy between EPS and revenue may indicate challenges in profit margins, which could influence investor confidence negatively.

The reported net income of $505 million alongside strong revenue figures of $4 billion over the past twelve months indicates that while Akamai is facing pressure in its earnings per share, it retains solid overall financial health. This resilience is crucial for stability and could influence stock performance amidst mixed analyst expectations.

**Historical Performance Analysis**
Akamai's historical earnings patterns present a mixed bag, with 56% of earnings announcements leading to stock declines. The median one-day drop observed is 10.1%, demonstrating a trend of weaker performance post-earnings. Analyzing the 1D post-earnings return data, it appears approximately 44% of time stocks reacted positively with a median return of 5.8%, but this still highlights the overall uncertainty in performance expectations.

**Potential Investor Strategies**
For investors engaged in event-driven trading, awareness of these historical patterns can help in strategizing positions ahead of the earnings announcement. Since the pricing-in might start even before the earnings report, investors may want to consider peer companies' performances, as they could create a ripple effect for Akamai's stock upon release.

As Akamai looks to maximize its growth from cloud security solutions, its traditional delivery business continues to face headwinds. Looking forward, investors will need to monitor the impacts of revenue streams diversifying and how it might enhance or dilute earnings moving into subsequent quarters. This balance will be key in determining future investment positions in Akamai.

Stocks: AKAM