Akamai Technologies: An addition to our top stock picks

posted by Virendra Singh Chauhan | published by Amigobulls on

Internet stock picks

Every earnings season brings along a degree of excitement as the battle of actual performance v/s estimates/expectations unfold. The earnings season is the right time for a fundamental investor to take a relook at investment decisions based on changes in the underlying fundamental indicators. We at Amigobulls believe in careful evaluation of companies based on its fundamentals and today we bring to you an update on our top stock picks post the Q3 2013 earnings season. Akamai technologies (NASDAQ: AKAM), not by a pull out of the hat but, by a careful evaluation through 50+ checkpoints has caught the eyes of the bulls at Amigo for its impressive performance. Let’s take a look at the company’s fundamentals.

Fundamental Indicators

The company has registered an increased sequential as well as Y/Y growth in the recent quarters. The revenue growth has mainly resulted from growth in performance & security solutions and service & support solutions seeing growth in excess of 20% over the last year. The profit margins have seen an expansion in the recent quarters compared to its three year and five year profit margins. The increasing revenue combined with expansion of profit margin is a favourable trend for any fundamental investor.

Akamai fundamental indicators

Akamai Relative Valuation

The relative valuation multiples of Akamai are also very attractive which is reflected in the table below. The stock has seen over 12% increase in the year to date but is still trading at a PE significantly lower than its peers.

Akamai relative valuation

The lower P/E and higher EPS growth makes the stock a really attractive investment opportunity. We are positive of the long term potential of the stock and have added the stock to our top stock picks. Keep reading here for more updates on our top stock picks.

To see Akamai’s latest stock price movement, click here (NASDAQ: AKAM)

Disclaimer: We do not hold any stake in the aforesaid stocks. Please read our detailed disclaimer.

About the author

Virendra Singh Chauhan
Virendra Singh Chauhan is a Financial Analyst at Amigobulls. An MBA(Finance) with specialization in investments, Virendra is a value investor who loves to analyze stocks and involve in discussions regarding investments in general. His areas of interest include personal finance as well as entrepreneurship, apart from equity analysis in particular. He loves companies with strong cash flows and profits today rather than companies built on promises of future. Contact him at virendra.chauhan AT amigobulls.com.
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recent comments

Lee Shawn profile picture
Lee Shawn
We have just used the one year EPS growth.
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Prashanth profile picture
Prashanth
Good article! You have calculated PEG based on EPS growth of 3 or 5 years?
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