Akamai Technologies (AKAM): Buy the Blowup - Piper Jaffray
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Piper Jaffray analyst, Mike Olson, reiterated his Overweight rating on shares of Akamai Technologies (NASDAQ: AKAM) along with his price target of $64. AKAM is down 13% since reporting Q2 (7/26) and providing below Street Q3 guidance due to the impact of two major customers taking traffic in-house. While Media Delivery is weak, the analyst expects strong continued Performance & Security growth.and a Media delivery re-acceleration in '17; if for no other reason than easier comps.
Excluding the company's six largest Internet platform customers which represent 11% of revenue, Akamai is growing 15% y/y. Historically, buying AKAM on guidance related pullbacks has proven to be a favorable strategy, with a 16% average six month upward move following five double digit earnings related drops in the stock over the past five years.
The analyst also believes Akamai's core non-security business is being undervalued, when accounting for a $2B-$3B valuation for the security segment.
Shares of Akamai Technologies closed at $50.21 yesterday.
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