Articles for Akamai

Akamai’s Cotendo Deal a Win for Shareholders, Defends Moat

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Friday, December 23rd, 2011 by Trefis Team

Akamai (NASDAQ:AKAM) said Thursday that it has reached an agreement to buy out Cotendo for a net cash payment of approximately $268 million. The move eliminates a key rival for Akamai in value-added services and also helps the company gain access to Cotendo’s Mobile Acceleration Technology. Founded in 2008 and backed by strategic partners such as Citrix, Juniper (NYSE:JNPR), Google (NASDAQ:GOOG) and AT&T (NYSE:T), Cotendo has an impressive list of customers that use its dynamic site acceleration (DSA) and application acceleration services, including some big names such as AT&T, Facebook and Zynga.

The news was well received by investors as Akamai’s shares rose almost 20% following the news, and it held on to most of its gains to close at $31.63. Our price estimate for Akamai is $31.74, in line with the market’s current bullish sentiment. Read More »

Deutsche Bank Update: Shares Jump on German Sentiment, $48 Fair Value

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Wednesday, December 21st, 2011 by Trefis Team

Deutsche Bank (NYSE:DB) saw its shares gain nearly 8% over trading yesterday when investors saw the prospects for the largest German bank in 2012 improve considerably following an unexpected improvement in the country’s business climate index. The strength of the German economy was further reinforced by the country reporting the lowest unemployment figures in nearly two decades. With things not looking so grim anymore for the entire European Union, global markets rallied yesterday, with bank stocks benefiting most. Shares of all major banks gained more than 3% at Wall Street over trading, with those for Barclays (NYSE:BCS) rising more than 7% followed by a near 5% boost for BNY Mellon (NYSE:BK), JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC). Deutsche Bank’s shares got an additional boost from the news that it settled its $217 million lawsuit with Akamai (NASDAQ:AKAM).

Akamai’s Cotendo Deal Would Add Margin Upside & Growth to Current $33 Value

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Tuesday, November 29th, 2011 by Trefis Team

Akamai (NASDAQ:AKAM) may be planning to buy Cotendo for more than $300 million, according to a report published in the Calcalist Financial daily Sunday. Cotendo is a smaller Israeli rival which competes with Akamai for value-added services founded in 2008 and launched in March of last year. The company has managed to raise over $36 million in funding from its investors like Sequoia Capital, Benchmark Capital and Tenaya Capital and also has the backing of strategic partners such as Citrix, Juniper (NYSE:JNPR), Google (NASDAQ:GOOG) and AT&T (NYSE:T). The private company has an impressive list of customers that use its dynamic site acceleration (DSA) and application acceleration services, including some big names such as AT&T, Facebook and Zynga.

Our price estimate for Akamai’s stock is $31, about 15% higher than the market price.

See our complete analysis for Akamai stock here

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With Cotendo Deal, Akamai Takes Out a Competitor & Gains Mobile Acceleration Technology

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Tuesday, November 29th, 2011 by Trefis Team

Akamai (NASDAQ:AKAM) is in an advanced stage of talks to buy out Cotendo, a smaller Israeli rival that may pose a serious threat to Akamai’s value-added services business, for more than $300 million according to a report published in the Calcalist Financial daily Sunday. Founded in 2008 and launched in March of last year, Cotendo has managed to raise over $36 million in funding from its investors Sequoia Capital, Benchmark Capital and Tenaya Capital and also has the backing of strategic partners such as Citrix, Juniper (NYSE:JNPR), Google (NASDAQ:GOOG) and AT&T (NYSE:T). The private company has an impressive list of customers that use its dynamic site acceleration (DSA) and application acceleration services, including some big names such as AT&T, Facebook and Zynga. We believe that Akamai is looking to acquire Cotendo to remove one of its fastest growing competitors which is hurting its profit margins while gaining access to its customer base and mobile acceleration technology.

Our price estimate for Akamai’s stock is $31, about 15% higher than the market price.

See our complete analysis for Akamai stock here

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Akamai’s Stock Gets Earnings Boost, Revising Estimates to $31

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Friday, October 28th, 2011 by Trefis Team

Akamai (NASDAQ:AKAM) announced its Q3 earnings on Wednesday evening reporting better-than-expected revenue growth of 11% over the same period last year sending its stock 15% higher Thursday. The company saw strong customer additions that boosted the top-line and alleviated market concerns as the stock rose almost 15% in pre-market trading and then held on to its gains though the the closing bell yesterday. However, gross margins fell by a full percentage point from last quarter as pricing pressures increased due to competition from Limelight Networks (NASDAQ:LLNW), InterNAP Network Services (NASDAQ:INAP) and Level 3 (NASDAQ:LVLT).

We have revised our Akamai estimates slightly to$31, which is about 10% higher than the market price.

See our complete analysis for Akamai stock here

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Akamai Q3 Preview: What We’re Watching Wednesday

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Monday, October 24th, 2011 by Trefis Team

Akamai (NASDAQ:AKAM) plans to announce its Q3 earnings on Wednesday. From the past three quarters, Akamai has been revising its revenue outlook lower triggering sell offs following each announcement and contributed to a cumulative slide of around 50% in the last year. This earnings call we will be closely watching the pricing pressures that Akamai has been facing from competitors such as Limelight Networks (NASDAQ:LLNW), InterNAP Network Services (NASDAQ:INAP) and Level 3 (NASDAQ:LVLT) for its content delivery network (CDN) service and Cotendo for its value-added services. We will also look for any signs of a slowdown in customer additions as telecom providers like AT&T (NYSE:T) have started to venture into providing their own CDN services..

Our $31 price estimate for Akamai’s stock is about 35% above market price.

See our complete analysis for Akamai stock here

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Amid Akamai Acquisition Chatter, Earnings Could Again Sink Stock

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Monday, October 17th, 2011 by Trefis Team

Over the past few weeks, Akamai (NASDAQ:AKAM) stock’s volatility has increased as the speculation around its acquisition has gained strength. Akamai’s stock has declined by more than 50% from the highs of $50 at the beginning of the year to $24 as of today, and this decline has made it an attractive acquisition target. It all started when the speculation that Akamai could be acquired either by IBM (NYSE:IBM) or Verizon (NYSE:VZ) circulated the rumor mill. A few weeks ago, the stock jumped again on the speculation that Google (NASDAQ:GOOG) could be interested in buying Akamai (see Akamai Shares Swing on Google Takeover Rumors, Fair Value at $31). Google has subsequently denied these intentions.

We believe that the next big trigger for Akamai’s stock would be its Q3 2011 earnings expected to be announced by the company on October 26th. History suggests that Akamai’s stock moves a lot on the day the earnings are announced. If we look back at the last three quarters’ of data, the Akamai stock has crashed every time on the earnings day (see Akamai’s Stock Crashes on Weak Outlook, Sell Off Overdone).

Each time, the market has punished Akamai on the account of weak outlook provided during earnings announcement. Hence the upcoming earnings announcement becomes crucial from Akamai’s point of view, and could decide the direction that the stock will take in this quarter.

Our $31 price estimate for Akamai stock is about 25% above market price.

See our complete analysis for Akamai stock here

Akamai Shares Swing on Google Takeover Rumors, Fair Value at $31

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Thursday, October 13th, 2011 by Trefis Team

Akamai’s stock were up as much as 17% in after hours trading fueled by rumors that Google (NASDAQ:GOOG) is planning to acquire the company. Reports later came out that the rumors were baseless. By the end of the day, the stock had pared most of its gains to close at $23.37, about 25% lower than our $31 price estimate.

This is not the first time Akamai has been the target of such speculations. Earlier in the month, it was rumored that Akamai may be acquired by companies like IBM (NYSE:IBM) or Verizon (NYSE:VZ).

Akamai’s Fair Value Close to $31 if Acquired

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Thursday, October 6th, 2011 by Trefis Team

Akamai’s (NASDAQ:AKAM) stock has been volatile over the last few weeks, and in the last two days of trading session it has gained by about 20% on the speculation that Akamai could be an acquisition target for companies like IBM (NYSE:IBM) or Verizon (NYSE:VZ). If we look at Akamai’s stock year to date performance, the stock has declined by around 60% from the highs of $50 at the beginning of the year to $22 as of today.

The fall has been dramatic even if we consider that Akamai continues to face pricing pressures from competitors like Limelight Networks (NASDAQ:LLNW), InterNAP Network Services (NASDAQ:INAP) and Level 3 (NASDAQ:LVLT) for its content delivery network (CDN) service. This dramatic fall makes Akamai a great acquisition target for other companies. We believe that the sell-off has been overdone and our $31 price estimate for Akamai stock is about 40% above market price.

See our complete analysis for Akamai stock here

Akamai’s Stock Crashes on Weak Outlook, Sell Off Overdone

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Thursday, July 28th, 2011 by Trefis Team

Akamai (NASDAQ:AKAM) announced its Q2 earnings and revised its revenue outlook lower for 2011. Akamai now expects revenue growth for 2011 to be between 10-13% compared to the previous expectation of 15% growth. This and a weaker outlook overall has caused the stock to collapse this morning which is now trading around 20% below yesterday’s close. In our pre-earnings article titled Akamai Earnings Preview: Pricing & CDN Competition in Focus, we had mentioned that we would be closely watching the pricing pressures that Akamai faces from competitors like Limelight Networks (NASDAQ:LLNW), InterNAP Network Services (NASDAQ:INAP) and Level 3 (NASDAQ:LVLT) for its content delivery network (CDN) service. This competition is precisely what is weighing on the stock.