Akamai Technologies, Inc. AKAM
Akamai's strategic pivot toward cloud infrastructure is showing genuine traction — Cloud Infrastructure Services revenue grew 39% YoY to $99M in Q2 2026 — but the profitability and balance sheet deterioration remain unresolved. FY2025 EPS fell to $3.07 (down from $3.93 in FY2021), gross margin compressed to 54.7% from 63.3% over the same period, and total debt more than doubled to $6.9B to fund the buildout.
At a P/E of 37.2x — a 52% premium to the peer median of 24.4x — the stock still prices in a margin recovery that the heavy capex cycle ($819.5M in FY2025) has not yet delivered, and insiders remain net sellers at -$33.7M over 24 months. The stock's 22% three-month decline and RSI near 37 suggest near-term oversold conditions, but until CIS scale translates into stabilized operating margins, the risk/reward at this multiple is balanced rather than compelling.
What could go wrong
- Margin compression persists. Gross margin has declined every year from 63.3% in FY2021 to 54.7% in FY2025, and operating margin fell from 22.6% to 14.9%, suggesting the cloud infrastructure buildout is diluting profitability faster than it is accreting.
- Leverage risk. Total debt surged from $2.86B in FY2021 to $6.91B in FY2025 while FCF declined from $859M to $699M, raising concerns about debt service capacity if the pivot does not accelerate.
- Insider selling. Insiders have been net sellers with net value of -$33.7M over 24 months, including recent sales by the EVP of Global Sales and CTO at prices above the current $105.74 close.
- Delivery segment weakness. News reports highlight ongoing Delivery weakness that offsets CIS growth, creating a mixed top-line profile despite the 5.4% FY2025 revenue growth.
What would change my mind
Where this comes from: Zacks news article, 2026-08-24 · FMP annual fundamentals · derived_metrics · FMP annual fundamentals. Orin's read on AKAM; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All AKAM filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Capital World Investors | $1.3B | 0.2% of fund |
| Vanguard Capital Management | $1.1B | 0.0% of fund |
| Vanguard Portfolio Management | $857.9M | 0.0% of fund |
| State Street | $682.6M | 0.0% of fund |
| Geode Capital Management | $501.5M | 0.0% of fund |
| Invesco | $462.6M | 0.0% of fund |
97 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 265 Form 4 filings, net −$34.0M. Of the 50 on hand, 0 were open-market purchases and 14 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about AKAM
Orin answers questions about AKAM from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 38.9× | 28.7× | 53.3× |
| EV/EBITDA | 18.6× | 14.7× | — |
| P/S | 3.71× | 3.71× | — |
| P/B | 3.4× | 3.1× | — |
Its P/E sits above all 5 of the last 5 years (+4.20σ from its own mean).
9.6%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.7B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$160
$123 – $195 · +35% against today's price
- 26 buy or overweight
- 25 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| AKAMAkamai Technologies, Inc. | $16B | 38.9× | 18.6× | 56.4% | 9.5% | 8% |
| JKHYJack Henry & Associates, Inc. | $10B | 21.2× | 12.2× | 43.6% | 19.8% | 23% |
The median is of the 1 peers listed above and nothing else — check it against the column. This company trades 83.7% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $153 | $132.73 · +16% | 2026-06-10 |
| Levered DCF | $251 | $132.73 · +89% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.