With Akamai Technologies Stock Surging, Have You Considered The Downside?
Akamai Technologies (AKAM) stock is up 8.7% in 21 trading days. The rally reflects renewed optimism around its edge AI inference and robust security growth, but big moves like this often invite a tougher question: is the stock truly resilient when markets reverse?
Before judging its downturn reslience, let’s look at where Akamai Technologies stands today.
- Size: Akamai Technologies is a $14 Bil company with $4.2 Bil in revenue currently trading at $99.89.
- Fundamentals: Last 12 month revenue growth of 5.4% and operating margin of 14.9%.
- Liquidity: Has Debt to Equity ratio of 0.39 and Cash to Assets ratio of 0.1
- Valuation: Akamai Technologies stock is currently trading at P/E multiple of 31.9 and P/EBIT multiple of 22.7
- Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 80.4% within a year. See AKAM Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside Moderate valuation – making the stock Fairly Priced. For details, see Buy or Sell AKAM Stock
That brings us to the key consideration for investors chasing this rally: how resilient is AKAM stock if markets turn south? This is where our downturn resilience framework comes in. Suppose AKAM stock falls 20-30% to $70 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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2022 Inflation Shock
- AKAM stock fell 42.0% from a high of $121.92 on 20 April 2022 to $70.75 on 13 March 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 23 January 2024
- Since then, the stock increased to a high of $128.32 on 11 February 2024 , and currently trades at $99.89
| AKAM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -42.0% | -25.4% |
| Time to Full Recovery | 316 days | 464 days |
2020 Covid Pandemic
- AKAM stock fell 21.9% from a high of $102.56 on 19 February 2020 to $80.05 on 12 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 16 April 2020
| AKAM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -21.9% | -33.9% |
| Time to Full Recovery | 35 days | 148 days |
2018 Correction
- AKAM stock fell 36.9% from a high of $71.12 on 7 February 2017 to $44.91 on 21 August 2017 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 8 March 2018
| AKAM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -36.9% | -19.8% |
| Time to Full Recovery | 199 days | 120 days |
2008 Global Financial Crisis
- AKAM stock fell 84.3% from a high of $59.15 on 8 February 2007 to $9.29 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 11 February 2014
| AKAM | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -84.3% | -56.8% |
| Time to Full Recovery | 1,909 days | 1,480 days |
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