Akamai Technologies, Inc. Just Beat EPS By 17%: Here's What Analysts Think Will Happen Next
Akamai Technologies, Inc. (NASDAQ:AKAM) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 2.3% to hit US$793m. Akamai Technologies reported statutory earnings per share (EPS) US$0.95, which was a notable 17% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Akamai Technologies
Taking into account the latest results, the most recent consensus for Akamai Technologies from 19 analysts is for revenues of US$3.39b in 2021 which, if met, would be a decent 8.6% increase on its sales over the past 12 months. Per-share earnings are expected to increase 8.1% to US$3.75. Before this earnings report, the analysts had been forecasting revenues of US$3.37b and earnings per share (EPS) of US$3.79 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$122, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Akamai Technologies at US$162 per share, while the most bearish prices it at US$70.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Akamai Technologies'historical trends, as next year's 8.6% revenue growth is roughly in line with 7.2% annual revenue growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 14% next year. So it's pretty clear that Akamai Technologies is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Akamai Technologies analysts - going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Akamai Technologies that you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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