Akamai Technologies, Inc. (AKAM) Stock Soars on $1 Billion Share Buyback Plan & Q4 Earnings Beat


Investors of Akamai Technologies, Inc. (NASDAQ:AKAM) are certainly happy this morning after the company reported their 2015 Fourth Quarter Earnings yesterday and simultaneously announced an astounding $1 billion share buyback plan.

Fourth Quarter numbers came in better than Wall Street had been expecting, and this is one reason the stock is up 18% in the pre-market this morning. However, the big news, which is causing this stock to run up the most is that the company announced plans to buyback $1 billion worth of stock over the next six months, with a goal to offset the dilution of shares created by employee equity compensation within the company.

Akamai Technologies, Inc. (NASDAQ:AKAM) reported a Q4 EPS of $0.72 which beat the Street’s estimate of $0.62 per share. Revenue came in at $579 million, also surpassing analysts’ expectations of $560.72 million. The stock closed at $39.57 during the last trading session. It is down 43.56% since July 7, 2015 and is downtrending. It has underperformed the S&P500 by 34.09%.

From a total of 16 analysts covering Akamai Tech (NASDAQ:AKAM) stock, 7 rate it a “Buy”, 2 a “Sell”, and 7 a “Hold”. This means that 44% of the ratings are positive. The highest target price is $91 while the lowest target price is $49. The mean of all analyst targets is $71.73 which is 81.27% above today’s ($39.57) stock price. Akamai Tech was the topic of 21 analyst reports since July 29, 2015 according to the firm StockzIntelligence Inc. UBS maintained shares on January 6 with a “Buy” rating. JP Morgan downgraded shares to a”Neutral” rating and a $65 target share price in their report from an October 28. Goldman Sachs downgraded AKAM stock in a recent report from November 20 to a “Sell” rating. Morgan Stanley maintained the rating on October 28. Morgan Stanley has a “Equal-Weight” rating and a $70 price target on shares. Finally, FBR Capital maintained the stock with a “Underperform” rating in a report they issued on an October 29.

The institutional sentiment decreased to 1.1 in Q2 2015. It’s down 0.16, from 1.26 in 2015Q2. The ratio is negative, as 63 funds sold all their Akamai Technologies, Inc. shares they owned while 166 reduced their positions. 59 funds bought stakes while 194 increased their total positions. Institutions now own 163.62 million shares which is 6.89% more than the previous share count of 153.08 million in 2015Q2.

Blue Harbour Group L.P. holds 8% of its total portfolio in Akamai Technologies, Inc., equating to 3.72 million shares. Levy Harkins & Co Inc owns 177,694 shares representing 5.44% of their total US portfolio. Moreover, Afton Capital Management Llc has 5.11% of their total portfolio invested in the company, equating to 25,000 shares. The California-based Magee Thomson Investment Partners Llc has a total of 4.05% of their portfolio invested in the stock. Waterstone Capital Management L.P., a Minnesota-based fund reported 73,000 shares owned.

Since March 5, 2015, the stock had 0 insider buys, and 2 sales for a total of $1.16 million in net activity. Hughes Robert W sold 13,361 shares worth $991,520. Mcconnell Rick M sold 2,244 shares worth $163,834. Sagan Paul sold 35,000 shares worth $2.66M. Gemmell James sold 1,867 shares worth $135,694. The insider Seligman Naomi O sold 2,000 shares worth $150,400.

Akamai Technologies, Inc. is a provider of cloud services for delivering, optimizing and securing online content and business applications. The company has a market cap of $6.80 billion. The Company’s solutions include delivery of conventional content on Websites, tools that support the delivery and operation of cloud applications, as well as security solutions, and live and on-demand streaming video capabilities. It has 21.66 P/E ratio. The Company’s solutions include Media Delivery Solutions, Performance and Security Solutions, and Service and Support Solutions.