Akamai Upside from Customer Growth
Akamai delivers fast and secure web content on behalf of websites to end users through its vast network of servers. Trefis members have created forecasts for two key drivers of Akamai’s (NASDAQ:AKAM) stock over the last week: (1) Number of Software & Gaming Customers and (2) Number of Akamai Media Business Customers.
The Trefis member forecasts suggest that the Number of Software & Gaming Customers and Number of Akamai Media Business Customers will trend slightly higher than the Trefis forecast. These projections suggest a combined upside of 2-3% for Akamai’s stock.
Media Content Delivery forms 28% of the $27 Trefis price estimate for Akamai’s stock. In comparison, Software & Game Content Delivery accounts for 16% of the stock. Primary competitors of Akamai include Limelight, Level3, and Internap.
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Since both media content and software & gaming content are growing businesses, Akamai’s stock is quite sensitive to (1) Number of Software & Gaming Customers and (2) Number of Akamai Media Business Customers. Below are charts showing recent estimates created by Trefis members for the two drivers.
1. Number of Software & Gaming Customers
The average of forecasts for Number of Software & Gaming Customers created by Trefis members indicated a projected increase from 554 in 2010 to 770 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 585 in 2010 to 698 by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Akamai’s stock. In the past, Number of Software & Gaming Customers has increased from 525 in 2008 to 552 in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Akamai’s stock to Number of Software & Gaming Customers.
Our complete analysis for Number of Software & Gaming Customers is here.
2. Number of Akamai Media Business Customers
The average of forecasts for Number of Akamai Media Business Customers created by Trefis members indicated a projected increase from 1,013 in 2010 to 1,208 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 962 in 2010 to 1,094 by the end of the Trefis forecast period. The member estimates imply an upside of 3% to the Trefis price estimate for Akamai’s stock. In the past, Number of Akamai Media Business Customers has increased from 881 in 2008 to 925 in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Akamai’s stock to Number of Akamai Media Business Customers.