Is Akamai (AKAM) Undervalued After a 10% Year-To-Date Share Price Decline?

Akamai Technologies (AKAM) has quietly lagged this year, with the stock down almost 10% year to date despite steady revenue and faster growing earnings. This naturally raises valuation questions.

See our latest analysis for Akamai Technologies.

Despite the year to date share price return of negative 10 percent and a one year total shareholder return of negative 11.74 percent, the 90 day share price return of 12.44 percent suggests tentative momentum is starting to rebuild around Akamai’s security and cloud growth story at about 85.88 dollars per share.

If Akamai’s recent swings have you rethinking your tech exposure, this could be a useful moment to explore high growth tech and AI stocks for other growth ideas in the space.

Given that backdrop of slow but steady fundamentals, solid double digit earnings growth, and a share price still trading at a discount to analyst targets, is Akamai quietly undervalued or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 9.8% Undervalued

Compared with Akamai Technologies’ last close of 85.88 dollars, the most widely followed narrative sees room for upside based on improving earnings power and margins.

The proliferation of AI applications requiring secure, ultra low latency infrastructure benefits Akamai's globally distributed platform, as evidenced by new AI Gateway and Firewall for AI offerings. This positions the company to capture new AI driven workloads, supporting both future top line growth and potentially higher net margins via value added solutions.

Read the complete narrative.

Curious how steady revenue growth, rising margins, and a leaner share count can still point to upside from here? The full narrative lays out the math behind that conviction.

Result: Fair Value of $95.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent CDN revenue declines and heavier compute investment needs could compress margins and challenge the idea that Akamai’s earnings power will steadily compound.

Find out about the key risks to this Akamai Technologies narrative.

Build Your Own Akamai Technologies Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just minutes, Do it your way.

A great starting point for your Akamai Technologies research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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