Goldman Sachs Is Not Worried About Akamai's (AKAM) Share Loss at High-Profile Client
Tweet
Share
E-mail
Get Alerts AKAM Hot Sheet
Price: $110.42 +0.30%
Rating Summary:
18 Buy, 20 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
18 Buy, 20 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Join SI Premium – FREE
Analysts at Goldman Sachs weighed in on Akamai Technologies (Nasdaq: AKAM) today following news yesterday that high-profile client Netflix (Nasdaq: NFLX) is giving its business to rival vendors Limelight (Nasdaq: LLNW) and Level 3 (Nasdaq: LVLT).
While the firm doesn't believe that Akamai's relationship with Netflix is coming to an end, they do expect the company to have a lower share of Netflix's video business next year.
The firm believes the shift at Netflix is about economics, not capabilities. "Conversations with large media customers have tended to highlight Akamai’s superiority on multiple fronts," the firm states.
While the news may likely raise questions about the economic attractiveness from online video, Limelight's own recent commentary indicated relative pricing stability at the high end, the firm noted.
In addition, the firm said their Akamai model already assumes "relatively modest growth from volume biz through 2011 (about 10%), with most growth coming from higher-margin value-added services."
The firm is maintaining its Buy rating and $60 price target on Akamai.
Share of AKAM are up 26% since Goldman Sachs upgraded the stock in August, according to data at StreetInsider.com's Rating Central, so their comments may pull some weight.
Shares of Akamai are flat today after falling nearly 5 percent yesterday.
While the firm doesn't believe that Akamai's relationship with Netflix is coming to an end, they do expect the company to have a lower share of Netflix's video business next year.
The firm believes the shift at Netflix is about economics, not capabilities. "Conversations with large media customers have tended to highlight Akamai’s superiority on multiple fronts," the firm states.
While the news may likely raise questions about the economic attractiveness from online video, Limelight's own recent commentary indicated relative pricing stability at the high end, the firm noted.
In addition, the firm said their Akamai model already assumes "relatively modest growth from volume biz through 2011 (about 10%), with most growth coming from higher-margin value-added services."
The firm is maintaining its Buy rating and $60 price target on Akamai.
Share of AKAM are up 26% since Goldman Sachs upgraded the stock in August, according to data at StreetInsider.com's Rating Central, so their comments may pull some weight.
Shares of Akamai are flat today after falling nearly 5 percent yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Advance Auto Parts (AAP) PT Lowered to $48 at DA Davidson Following 25% Selloff Post Q2 Results
- Beike (BEKE) PT Raised to $23 at Morgan Stanley
- Deere (DE) PT Raised to $585 at JPMorgan
Create E-mail Alert Related Categories
Analyst Comments, Insiders' BlogSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
