Last week, you might have seen that Akamai Technologies, Inc. (NASDAQ:AKAM) released its quarterly result to the market. The early response was not positive, with shares down 7.4% to US$80.29 in the past week. It looks like a credible result overall - although revenues of US$1.1b were what the analysts expected, Akamai Technologies surprised by delivering a (statutory) profit of US$0.77 per share, an impressive 20% above what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Akamai Technologies after the latest results.
Taking into account the latest results, the consensus forecast from Akamai Technologies' 21 analysts is for revenues of US$5.33b in 2027. This reflects a substantial 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 4.8% to US$2.82. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.22b and earnings per share (EPS) of US$2.87 in 2027. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.
Check out our latest analysis for Akamai Technologies
Even though revenue forecasts increased, the consensus price target 15% to US$132, perhaps suggesting thatthe analysts have become more pessimistic about the lack of earnings growth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Akamai Technologies at US$225 per share, while the most bearish prices it at US$73.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Akamai Technologies' past performance and to peers in the same industry. It's clear from the latest estimates that Akamai Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 4.9% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 14% per year. Akamai Technologies is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also upgraded their revenue forecasts, although the latest estimates suggest that Akamai Technologies will grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Akamai Technologies going out to 2028, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Akamai Technologies you should be aware of.
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