Deutsche Bank Cuts Price Target by 20% on Akamai Technologies (AKAM) Due To Poor Guidance

Deutsche Bank is maintaining its Hold rating on shares of Akamai Technologies (NASDAQ: AKAM) as the company posted some mixed Q1 results and poor Q2 guidance.

Concerns around pricing are weighing heavy on Q2 guidance as lower volume growth is quickly rising as a new headwind. The company released its Q2 guidance with an expected revenue range of $270-$280 million and an EPS range of $0.34-$0.37.

The firm is lowering its FY11 revenue and EPS estimates to $1.17 billion and $1.51 from 1.19 billion and $1.59, and is cutting its price target 20% to $40 from $50.

Deutsche Bank reports that, "pricing concerns have persisted for Akamai since the Netflix (Nasdaq: NFLX) issue late last year. With several large deals up for renewal in 1Q’11, the decline in cash gross margins was not completely unexpected. The long-term potential is still significant given the low penetrations of online video, but near-term volume growth could be more muted until the 2H. We think the stock is likely range-bound until volume growth improves."

For more ratings news on Akamai Technologies click here and for the rating history of Akamai Technologies click here.

Shares of Akamai Technologies closed at $40.98 yesterday.

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