MKM Partners Reiterates Buy on Akamai Technologies (AKAM)
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MKM Partners reiterated a Buy rating and $65.00 price target on Akamai Technologies (NASDAQ: AKAM). Media revenue continues to decline as top-2 customers, Apple and Facebook, shift to internal capacity. We believe these customers will represent about 2.5% of revenue by Q4’16 from 12% of revenue six quarters earlier.
Analyst Rob Sanderson commented, "We were wrong to predict that 2016 would be the year that Internet video would hit an inflection. We do however see three identifiable catalysts that could move the market in 2017. We think AKAM will factor prominently into each. Investors appear to be waiting for visibility on a bottom in revenue drag from top customers. There is solid underlying growth as media revenue outside of the top-6 Internet platforms grew by 15% last quarter (79% of segment revenue) and Cloud Security remains a +40% growth segment. With the stock at 8x forward 12-month EBITDA (historic normal range of 7x to 12x), we think AKAM could be a great performing stock in 2017."
Shares of Akamai Technologies closed at $52.41 yesterday.
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