Akamai Technologies Inc (NASDAQ: AKAM)

Sector: Technology Industry: Software - Infrastructure CIK: 0001086222
P/B 2.71
P/E 25.29
P/S 3.10
Market Cap 12.82 Bn
ROIC (Qtr) 5.10
Div Yield % 0.00
Rev 1y % (Qtr) 4.97
Total Debt (Qtr) 5.23 Bn
Debt/Equity (Qtr) 1.11

About

Stock Price Chart

Analysis

Pros

  • Healthy cash reserves of 927.93M provide 3.30x coverage of short-term debt 281.35M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 1.50B provides exceptional 50.54x coverage of interest expenses 29.60M, showing strong debt service capability.
  • Tangible assets of 7.02B provide exceptional 37.83x coverage of deferred revenue 185.43M, showing strong service capability backing.
  • Operating cash flow of 1.50B provides strong 8.07x coverage of deferred revenue 185.43M, indicating service delivery capability.
  • Free cash flow of 718.30M provides exceptional 24.27x coverage of interest expense 29.60M, showing strong debt service ability.

Cons

  • Operating cash flow of 1.50B barely covers its investment activities of (418.54M), with a coverage ratio of -3.57, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (418.54M) provide weak support for R&D spending of 494.35M, which is -0.85x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 927.93M provide limited coverage of acquisition spending of (157.11M), which is -5.91x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 1.50B shows concerning coverage of stock compensation expenses of 439.22M, with a 3.41 ratio indicating potential earnings quality issues.
  • Operating earnings of 686.20M show weak coverage of depreciation charges of 694.05M, with a 0.99 ratio indicating high capital intensity and potential reinvestment needs.

Peer Comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,542.10 Bn 33.76 12.06 60.56 Bn
2 ORCL Oracle Corp 533.93 Bn 34.61 8.75 124.39 Bn
3 PLTR Palantir Technologies Inc. 437.56 Bn 399.47 112.31 0.24 Bn
4 PANW Palo Alto Networks Inc 125.16 Bn 112.03 13.10 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 120.85 Bn -384.67 26.47 0.82 Bn
6 SNPS Synopsys Inc 71.69 Bn 35.89 11.14 15.14 Bn
7 NET Cloudflare, Inc. 67.84 Bn -658.43 33.70 3.50 Bn
8 FTNT Fortinet, Inc. 63.33 Bn 33.80 9.66 1.00 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 1.59 2.56
EV to Cash from Ops. 11.52 38.32
EV to Debt 3.30 -11.37
EV to EBIT 25.12 -12.79
EV to EBITDA 13.12 7.72
EV to Free Cash Flow [EV/FCF] 24.00 24.22
EV to Market Cap 1.34 0.58
EV to Revenue 4.17 -35.00
Price to Book Value [P/B] 2.71 3.74
Price to Earnings [P/E] 25.29 -18.61

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % 0.00 2.69
Dividend per Basic Share 0.00 0.10
FCF Dividend Payout Ratio % 0.00 1.67
Interest Coverage 23.18 -13.15

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % -18.49 -404.11
Cash and Equivalents Growth (1y) % 62.87 226.02
Dividend Growth (1y) % 0.00 -0.27
EBIAT Growth (1y) % -3.54 31.15
EBITDA Growth (1y) % 9.68 49.02
EBIT Growth (1y) % 5.18 25.85
EBT Growth (1y) % 5.03 17.82
EPS Growth (1y) % 0.29 70.69
FCF Growth (1y) % -20.92 295.45
Gross Profit Growth (1y) % 3.27 49.96

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.38 0.68
Cash Payout Ratio 0.00 0.02
Cash Ratio 0.98 1.21
Current Ratio 2.28 2.57
Debt to Equity Ratio 1.11 -0.93
Interest Cover Ratio 23.18 -13.15
Times Interest Earned 23.18 -13.15

Profitability

Metric Value Industry Percentile
EBITDA Margin % 33.40 -544.82
EBIT Margin % 16.60 -197.78
EBT Margin % 15.89 -602.74
Gross Margin % 59.10 52.06
Net Profit Margin % 12.30 -605.52