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Akamai Technologies Lose Sheen after Posting Mixed Q1 Results

Akamai Technologies, Inc. (AKAM) has delivered mixed results for the first quarter of 2022. Shares of AKAM declined 10.6% in Tuesday’s extended trading session and a further 14% at the time of writing.

The company engages in the provision of cloud services for delivering, optimizing and securing content and business applications over the Internet. 

Results

Adjusted earnings of $1.39 per share rose 1% from the same quarter last year, lagging the consensus estimate of $1.42 per share. Revenues increased 7% year-over-year to $904 million, outpacing estimates of $903.9 million.

Security revenue rose 23% year-over-year, while Compute revenue increased 32% to $78 million. However, Delivery revenue declined 6% year-over-year. 

Adjusted EBITDA for the first quarter was $391 million, up 4% from the same quarter last year. Cash generated from operations stood at $222 million.

The CEO of Akamai, Dr. Tom Leighton, said, “Despite a challenging global environment and the headwinds associated with the strengthening U.S. dollar, Akamai delivered results in line with our Q1 guidance… We achieved several notable Guardicore segmentation wins in the quarter, and are enthusiastic about our potential to transform the cloud landscape with our Linode acquisition.”

Stock Rating

Based on six Buys, four Holds and one Sell, the stock has a Moderate Buy consensus rating. Akamai’s average price forecast of $123.40 implies 8.4% upside potential from current levels. Shares have gained 8.2% over the past year.

Positive Sentiments

TipRanks’ Stock Investors tool shows that investors who hold portfolios on TipRanks’ Smart Portfolio currently have a Very Positive stance on Akamai, as 9.7% of investors increased their exposure to AKAM stock over the past 30 days.

Final Thoughts

The company’s decent results, involvement in inorganic growth and the recent price correction are likely to spike investors’ interest in the stock.

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