Akamai Stock Analysis: Why Buy Akamai?

  • 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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Vikram Nagarkar Vikram Nagarkar   on Amigobulls :

Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice.

Buying and selling of securities carries the risk of monetary losses.Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.

Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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