Why Akamai Technologies (AKAM) Outpaced the Stock Market Today

Akamai Technologies (AKAM) closed the most recent trading day at $118.00, moving +1.94% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.11%. On the other hand, the Dow registered a loss of 0.13%, and the technology-centric Nasdaq increased by 0.18%.

Coming into today, shares of the cloud services provider had gained 12.4% in the past month. In that same time, the Computer and Technology sector lost 3.85%, while the S&P 500 lost 4.28%.

Analysts and investors alike will be keeping a close eye on the performance of Akamai Technologies in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.64, indicating a 3.53% decline compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $1.07 billion, indicating a 5.87% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $6.93 per share and a revenue of $4.48 billion, representing changes of -2.67% and +6.51%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Akamai Technologies. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.1% higher. Right now, Akamai Technologies possesses a Zacks Rank of #3 (Hold).

Looking at its valuation, Akamai Technologies is holding a Forward P/E ratio of 16.71. This indicates a premium in contrast to its industry's Forward P/E of 14.25.

We can also see that AKAM currently has a PEG ratio of 2.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. As the market closed yesterday, the Internet - Services industry was having an average PEG ratio of 1.87.

The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 172, this industry ranks in the bottom 30% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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