Down Almost 15% This Year, Is Akamai Stock Set To Bounce On The Back Of Strong Earnings?

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AKAM: Akamai logo
AKAM
Akamai

Akamai Technologies Inc. stock (NASDAQ: AKAM) is down 11% in the past month (21 trading days), underperforming the S&P 500 which was down almost 3% over this period. If you look at the change over the last five and ten days, too, the stock has returned -9.7% and -12%, underperforming the broader market on both occasions. However, last week Akamai reported strong FY ’21 earnings, with revenue rising from $3.2 billion in FY ’20 to $3.46 billion in FY ’21. Further, a slower rise in COGS and operating expenses, saw operating margins rise from 20.6% to 22.6%, and despite a higher effective tax rate, EPS rose from $3.43 in FY ’20 to $4.01 in FY ’21. Additionally, Akamai announced plans to close its $900 million acquisition of Linode, an infrastructure-as-a-service company, in the current quarter (Q1 ’22). Despite this, a lower-than-expected Q1 ’22 and FY ’22 revenue guidance by the company led to a sell-off in its stock, which is now down almost 15% in 2022.

Now, is Akamai stock set to continue its underperformance or could we expect a rally? We believe that there is a strong 68% chance of a rise in Akamai stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on AKAM Stock Chance of Rise. For additional details about Akamai’s historical returns and comparison to peers, see Akamai (AKAM) Stock Return. Additionally, for details about Akamai revenues and comparison to peers, see Akamai (AKAM) Revenue Comparison.

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Twenty-One Day: AKAM -11%, vs. S&P500 -2.8%; Underperformed market

(7% likelihood event; 68% probability of rise over next 21 days)

  • Akamai stock dropped -11% the last twenty-one trading days (one month), compared to a broader market (S&P500) drop of 2.8%
  • A change of -11% or more over twenty-one trading days is a 7% likelihood event, which has occurred 176 times out of 2517 in the last ten years
  • Of these 176 instances, the stock has seen a positive movement over the next twenty-one trading days on 119 occasions
  • This points to a 68% probability for the stock rising over the next twenty-one trading days

Ten Day: AKAM -12%, vs. S&P500 -3.2%; Underperformed market

(2% likelihood event; 43% probability of rise over next 10 days)

  • Akamai stock dropped 12% over the last ten trading days (two weeks), compared to a broader market (S&P500) drop of 3.2%
  • A change of -12% or more over ten trading days is a 2% likelihood event, which has occurred 61 times out of 2517 in the last ten years
  • Of these 61 instances, the stock has seen a positive movement over the next ten trading days on 26 occasions
  • This points to a 43% probability for the stock rising over the next ten trading days

Five Day: AKAM -9.7%, vs. S&P500 -1.4%; Underperformed market

(2% likelihood event; 49% probability of rise over next five days)

  • Akamai stock fell 9.7% over a five-day trading period ending 2/18/2022, compared to the broader market (S&P500) drop of 1.4%
  • A change of -9.7% or more over five trading days (one week) is a 2% likelihood event, which has occurred 53 times out of 2517 in the last ten years
  • Of these 53 instances, the stock has seen a positive movement over the next five trading days on 26 occasions
  • This points to a 49% probability for the stock rising over the next five trading days

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

Returns Feb 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 AKAM Return -12% -14% 50%
 S&P 500 Return -4% -9% 94%
 Trefis MS Portfolio Return -2% -11% 251%

[1] Month-to-date and year-to-date as of 2/21/2022
[2] Cumulative total returns since the end of 2016

 

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