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Akamai (AKAM) Should Have a White Christmas

November 27, 2012 12:10 PM EST Send to a Friend
Get Alerts AKAM Hot Sheet
Price: $53.77 --0%

Rating Summary:
    21 Buy, 10 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 15 | Down: 8 | New: 6
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Shares of Akamai Technologies (NASDAQ: AKAM) are lower Tuesday, but according to analysts at Wells Fargo it could be a White Christmas for the company.

Analysts at the firm noted data from ComScore showing a solid start to the on-line holiday season. Specifically, adding the spend for Thanksgiving day, Black Friday, and Cyber Monday - 2012 on-line spending is approximately $3.18B (+25% yr./yr.) vs the $2.55B (+22% yr./yr) in spending in 2011.

"The solid start to on-line holiday shopping should be a benefit for AKAM's e-commerce segment which accounts for just over 20% of the company's revenue," the firm comments. "Q4 is also typically strong for CDN business. Looking historically, AKAM's total revenue has improved an average of 14.5% in Q4 vs Q3 over the last 3 years (2011 +15.9%, 2010 +11.1%, 2009 +16.4% -- all ex FX and 1x items). Given that the Street Q4 revenue estimate of $381MM implies slightly over 12% sequential growth from Q3 (ex FX and estimated 1x items) - we feel confident that AKAM can meet or exceed Q4 estimates."

Trading at 14.5x 2013E FCF (ex net cash) with a high teens / 20% growth rate - the firm thinks valuation is attractive. They reiterated their Outperform rating.

For an analyst ratings summary and ratings history on Akamai Technologies click here. For more ratings news on Akamai Technologies click here.

Shares of Akamai Technologies last traded at $34.80, down 2.6 percent.




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