Why Akamai Technologies (AKAM) Dipped More Than Broader Market Today

In the latest trading session, Akamai Technologies (AKAM) closed at $114.50, marking a -2.35% move from the previous day. This change lagged the S&P 500's daily loss of 1.67%. At the same time, the Dow lost 1.73%, and the tech-heavy Nasdaq lost 2.15%.

Shares of the cloud services provider witnessed a gain of 17.37% over the previous month, beating the performance of the Computer and Technology sector with its loss of 7.41%, and the S&P 500's loss of 6.15%.

Investors will be eagerly watching for the performance of Akamai Technologies in its upcoming earnings disclosure. On that day, Akamai Technologies is projected to report earnings of $1.64 per share, which would represent a year-over-year decline of 3.53%. At the same time, our most recent consensus estimate is projecting a revenue of $1.07 billion, reflecting a 5.87% rise from the equivalent quarter last year.

AKAM's full-year Zacks Consensus Estimates are calling for earnings of $6.93 per share and revenue of $4.48 billion. These results would represent year-over-year changes of -2.67% and +6.51%, respectively.

It's also important for investors to be aware of any recent modifications to analyst estimates for Akamai Technologies. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

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 last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.98% decrease. Akamai Technologies is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Akamai Technologies has a Forward P/E ratio of 16.93 right now. This expresses a premium compared to the average Forward P/E of 15.51 of its industry.

Meanwhile, AKAM's PEG ratio is currently 2.43. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. AKAM's industry had an average PEG ratio of 1.64 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 175, this industry ranks in the bottom 29% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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

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