Guggenheim Starts Akamai Technologies (AKAM) at Sell

Guggenheim analyst Raymond McDonough initiates coverage on Akamai Technologies (NASDAQ: AKAM) with a Sell rating and a price target of $75.00.

The analyst comments "We are initiating coverage of Akamai with a SELL rating and a price target of $75, implying 14% potential downside. We view Akamai as a well-run company with the right strategic vision and a management team that has proven to be strong operators, but we see several risks which we believe are not accounted for. First, we believe the Street is underestimating investments needed to expand Linode’s footprint. While we see longer-term upside to Compute revenue, near-term capital intensity is likely to be higher (potentially significantly higher) than Street estimates, and we do not expect investors will give Akamai the benefit of the doubt in building out ahead of demand. Second, we see material risk in Security estimates as organic New Business growth has been decelerating for more than a year and the macro environment does not seem to be getting any less challenging. These factors lead to our FCF estimates in 2023 being approximately 18% below Street. Ultimately, we see a tactical opportunity where expectations are likely too high and execution risk too significant to ignore."

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 closed at $88.13 yesterday.

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