- Akamai's revenue growth has taken the company to a higher growth trajectory.
- Akamai's operating and net margins are stable, and gross margins are expanding.
- Our Akamai stock analysis assigns the stock a buy rating.
Should You Buy Akamai? Video Transcript.
Hello and welcome to this videograph about Akamai (NASDAQ:AKAM).
Akamai Revenue Growth
Akamai's revenue growth accelerated in 2014, marking a shift in the company's growth trajectory. While this was partly due to the slower growth in 2013, growth was impressive even in absolute Dollar terms.
Akamai Profit Margins
Akamai has very stable profit margins. Over 2014, the company continued to deliver operating and profit margins, in line with their long term averages.
Akamai Gross Margin Expansion
Akamai's Gross margins have improved significantly over a four year period. This gives Akamai greater flexibility in terms of discretionary and growth oriented expenditures, like sales and marketing for instance. And yet, Akamai is in a position to reign in those spends, to deliver margin expansion, should it decide to do so.
Why Buy Akamai?
Akamai's higher growth trajectory, stable operating and net margins, and gross margin expansion make it a robust company financially. What's more, Akamai's growth is tied to the inevitable growth of the internet. With the growing consumption of video content, Akamai looks poised for a solid future. Based on the various factors discussed, we think Akamai is a great investment opportunity for long term investors. However, conservative investors would do well to accumulate this stock on dips, given the recent post earnings rally, and the subsequent rise in Akamai's PE ratio and Price to sales multiple.
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