Akamai: Growth Potential, But Its Earnings Have Been In A Slump

2/22/19

Akamai Technologies, Inc. (NASDAQ:AKAM) provides cloud services for securing content over the Internet. The company has a history of steady revenue growth, but its earnings have slumped in recent years.

Management expects earnings to significantly improve heading into 2020 with the release of their new Zero Trust Enterprise Security product. Management also expects that the Janrain acquisition will boost earnings.

The company is conservatively financed, but its stock is expensive. I think that, at present, Akamai is a higher risk investment and would need a long time frame as there's volatility in the near term. Akamai does have a reliable history of revenue growth, and I think that sooner or later, the company will pull itself out of its earnings slump (which would give patient investors a solid capital gain). In the near term, I think its stock price will remain volatile.

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