Akamai (AKAM) Q4 Results Weak, Losing Video Customers to Level 3 (LVLT), but Bullish Trend Intact

February 7, 2013 11:59 AM EST
Get Alerts AKAM Hot Sheet
Price: $68.98 -0.89%

Rating Summary:
    21 Buy, 16 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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Akamai Technologies (Nasdaq: AKAM) stock opened significantly lower on Thursday after the company reported Q4 results and guidance that failed to meet expectations. Oppenheimer analyst Timothy Horan said the company may have lost some of its video customers to Level 3 Communications (NYSE: LVLT) due to price competition.

"AKAM's results are always volatile, and management is usually conservative, but we expect the stock to trade down by 15% or so on Thursday, though think it can hold its multiple in the 8x EBITDA range," said analyst Timothy Horan.

With a longer term view, Horan remains positive on the stock.

"While these are still early days in the migration from client server models to cloud computing, we believe AKAM is uniquely positioned to grow faster than the market, with a strong margin profile, solid balance sheet, an 8x multiple and the ability to grow EBITDA close to 15% per year in the next few years. We continue to believe that it will outperform from here," he said.

Oppenheimer maintained an Outperform rating on Akamai Technologies but lowered its price target to $48.00 (from $50.00).

For an analyst ratings summary and ratings history on Akamai Technologies (NASDAQ: AKAM) click here. For more ratings news on Akamai Technologies click here.

Shares of Akamai Technologies closed at $41.58 yesterday.

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