Why Did Akamai Technologies Stock Fall on February 8?



Akamai Technologies announces 4Q16 results

Akamai Technologies (AKAM) announced its 4Q16 results on February 8, 2017, and reported revenues of $616 million. AKAM’s revenues rose 6% YoY (year-over-year) from $579 million in 4Q15. Adjusting for currency fluctuations, its revenues rose 7% YoY. Revenues in fiscal 2016 rose 6% YoY to ~$2.3 billion from $2.2 billion in fiscal 2015.

Non-GAAP[1. generally accepted accounting principles] EPS (earnings per share) totaled $0.72 compared to analyst estimates of $0.68. AKAM expects revenues of $603 million in 1Q17 with EPS of $0.68. In comparison, analysts expect the company to post revenues of $605 million with EPS of $0.68.

Akamai Technologies (AKAM) stock has risen 55% in the trailing 12-month period and 26.7% in fiscal 2016. In comparison, Verisign (VRSN) and Facebook (FB), AKAM’s peers in the Internet, software, and services subsector, generated returns of 15%, and 34%, respectively, in the last 12 months.

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Analysts’ recommendations

Of the 24 analysts covering Akamai Technologies stock, 14 gave it “buy” recommendations, one gave it a “sell” recommendation, and nine gave it “hold” recommendations. Analysts’ consensus price target for Akamai is $71.85, with a median target estimate of $75.00.

Given these figures, Akamai Technologies is trading at a discount of 18% to the median analyst price target.


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