Rising Online Shopping Business Customers Could Boost Akamai’s Stock by 11%

+6.65%
Upside
109
Market
116
Trefis
AKAM: Akamai logo
AKAM
Akamai

Akamai (NASDAQ:AKAM) operates a worldwide network of servers that help customers deliver Internet content faster to their end users. It competes with players like InterNAP Network Services (NASDAQ:INAP) and Limelight Networks (NASDAQ:LLNW) in the online content delivery business. We currently have a Trefis price estimate of around $28 for Akamai’s stock, about 33% below the current market price of around $43.

Trefis members have created forecasts for two key drivers of Akamai’s stock over the last week: (1) Number of Akamai Online Shopping Business Customers and (2) Online Shopping Business Gross Margin. The members’ forecasts suggest that Number of Akamai Online Shopping Business Customers will trend above the Trefis estimate while Online Shopping Business Gross Margin will trend in line.

We estimate Online Shopping Content Delivery constitutes around 35% of the $28 Trefis price estimate for Akamai’s stock. Hence the stock is quite sensitive to (1) Number of Akamai Online Shopping Business Customers and (2) Online Shopping Business Gross Margin. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

Relevant Articles
  1. Akamai Stock Has Seen Little Change Since 2021. Will A Q3 Earnings Beat Drive The Stock Higher?
  2. What To Expect From Akamai’s Q2 Earnings?
  3. Cloud Business In Focus As Akamai Reports Q1 Results
  4. Will Akamai’s Cloud Computing Push Pay Off?
  5. Up Almost 6% Last Month, Can Akamai Continue Its Run?
  6. Here’s Why Akamai Stock Has Failed To Outperform The S&P Since 2017

1. Number of Akamai Online Shopping Business Customers

The average of forecasts for Number of Akamai Online Shopping Business Customers created by Trefis members indicated a projected increase from 2,047 in 2010 to around 3,133 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around 1,734 in 2010 to around 2,323 by the end of the Trefis forecast period. The member estimates imply an upside of 11% to the Trefis price estimate for Akamai’s stock. In the past, Number of Akamai Online Shopping Business Customers has increased from 1,459 in 2008 to around 1,605 in 2009.

Disagree? 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 Online Shopping Business Customers.

Our complete analysis for Number of Akamai Online Shopping Business Customers is here.

2. Online Shopping Business Gross Margin

The average of forecasts for Online Shopping Business Gross Margin created by Trefis members indicated a projected decrease from around 86% in 2010 to around 80% by the end of the Trefis forecast period, in line with the baseline Trefis estimates. The member estimates imply little upside to the Trefis price estimate for Akamai’s stock. In the past, Online Shopping Business Gross Margin has decreased from 87% in 2008 to 86% in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Akamai’s stock to Online Shopping Business Gross Margin.

Our complete analysis for Akamai’s stock is here.