Akamai Technologies Earnings Outlook: EPS Drop Expected

A report highlights Akamai Technologies' stock performance, revealing a projected EPS drop of 2.45% for the upcoming earnings report on November 7, 2024. Despite this, revenue is anticipated to rise, and the company maintains a hold rating amid market trends.

Date: 05-10-2024

AI Rating: 5

Akamai Technologies (AKAM) has shown a recent stock movement, closing at $101.48 with a gain of +1.03% in its last trading session, which surpassed the S&P 500's gain of 0.9% on the day. However, over the past month, its stock has climbed by just 1.34%, lagging behind both the Computer and Technology sector (5.76%) and the S&P 500 (3.15%).

Investors are anticipating financial results set for November 7, 2024. The projected Earnings Per Share (EPS) for Akamai is $1.59, reflecting a decrease of 2.45% from the same quarter last year. In contrast, analysts expect the company’s revenue to reach $1 billion, indicating an increase of 3.62% year-over-year. For the full year, the Zacks Consensus Estimates suggest earnings of $6.43 per share and total revenue of $4 billion, which represent annual growth rates of 3.71% and 4.84%, respectively.

The forthcoming EPS drop is a point of concern, indicating potential market skepticism about Akamai's profitability relative to previous performance. Nonetheless, the positive revenue growth projection positions the company to potentially sustain investor interest despite the EPS decline.

Akamai is currently rated with a Zacks Rank of #3 (Hold), suggesting a stable, yet cautious outlook. The Forward P/E ratio of 15.63 shows that the stock is trading at a discount compared to the industry average (28.54), and the PEG ratio stands at 2.21, slightly above the industry's average of 1.88, indicating a valuation that may not effectively reflect growth expectations.

The Zacks Industry Rank for the Internet - Services sector places it in the top 39% among over 250 industries, denoting a relatively healthy industry backdrop. Despite stagnant EPS estimates over the last month, expectations around revenue growth might positively impact stock performance, provided the company can efficiently capitalize on its existing market position.

Stocks: AKAM