Complete AKAM Stock Valuation Analysis
Comprehensive intrinsic value analysis using 5 different methodologies
AKAM DCF Analysis
AKAM (Akamai Technologies, Inc.) discounted cash flow analysis with multiple scenarios, growth assumptions, and terminal value calculations
Financial Projections
| Metrics | 2022 (Historical) | 2023 (Historical) | 2024 (Historical) | 2025 (Projected) | 2026 (Projected) | 2027 (Projected) | 2028 (Projected) | 2029 (Projected) |
|---|---|---|---|---|---|---|---|---|
| Revenue | $3.6B | $3.8B | $4.0B | $4.2B | $4.4B | $4.6B | $4.8B | $4.9B |
| Revenue Growth % | - | 5.4% | 4.7% | 5.2% | 4.7% | 4.2% | 3.8% | 3.4% |
| EBIT | $676.3M | $637.3M | $533.4M | $682.9M | $719.4M | $754.4M | $787.9M | $819.8M |
| EBIT Margin % | 18.7% | 16.7% | 13.4% | 16.3% | 16.4% | 16.5% | 16.6% | 16.7% |
| Tax Rate % | 19.3% | 16.3% | 14.0% | 13.1% | 14.3% | 15.5% | 16.7% | 17.9% |
| NOPAT | $546.1M | $533.4M | $458.8M | $593.3M | $616.5M | $637.5M | $656.4M | $673.3M |
| NOPAT Margin % | 15.1% | 14.0% | 11.5% | 14.1% | 14.0% | 13.9% | 13.8% | 13.7% |
| Capex | $458.3M | $730.0M | $685.3M | $679.8M | $676.1M | $669.5M | $660.2M | $648.7M |
| Capex / Revenue % | 12.7% | 19.2% | 17.2% | 16.2% | 15.4% | 14.6% | 13.9% | 13.2% |
| Depreciation | $592.8M | $570.8M | $648.4M | $666.5M | $697.8M | $727.3M | $755.0M | $780.8M |
| D&A / Revenue % | 16.4% | 15.0% | 16.2% | 15.9% | 15.9% | 15.9% | 15.9% | 15.9% |
| Change in NWC | $20.6M | $-181.9M | $-482.0M | $-56.6M | $-47.4M | $-39.6M | $-32.8M | $-27.2M |
| NWC Change / Revenue % | 0.6% | -4.8% | -12.1% | -1.3% | -1.1% | -0.9% | -0.7% | -0.6% |
| Unlevered FCF | $659.9M | $556.1M | $904.0M | $636.6M | $685.6M | $734.9M | $784.0M | $832.6M |
| UFCF % Chg. | - | -15.7% | 62.6% | -29.6% | 7.7% | 7.2% | 6.7% | 6.2% |
| FCF / Revenue % | 18.2% | 14.6% | 22.6% | 15.2% | 15.6% | 16.0% | 16.5% | 16.9% |
| Discount Factor | - | - | - | 0.937 | 0.878 | 0.823 | 0.772 | 0.723 |
| Present Value of FCF | - | - | - | $596.7M | $602.2M | $605.0M | $605.0M | $602.1M |
| Sum of PV of UFCF | - | - | - | $596.7M | $1.2B | $1.8B | $2.4B | $3.0B |
WACC Calculation
Weighted Average Cost of Capital used for discounting cash flows.
| WACC Calculation | Value |
|---|---|
| Cost of Debt | 4.8% |
| Tax Rate | 13.1% |
| After Tax Cost of Debt | 4.2% |
| Risk Free Rate | 4.34% |
| Market Risk Premium | 4.3% |
| Beta | 0.78 |
| Cost of Equity | 7.7% |
| Total Debt | $4.6B |
| Market Cap | $11.6B |
| Total Capital | $16.2B |
| Debt Weighting | 28.6% |
| Equity Weighting | 71.4% |
| WACC | 6.7% |
Terminal Value
Choose between perpetuity growth or exit multiple methods.
| Terminal Value Calculation | Value |
|---|---|
| Terminal Growth Rate | 2.5% |
| Final Year FCF | $832.6M |
| Terminal Value | $20.3B |
| PV of Terminal Value | $14.7B |
| Cumulative PV of UFCF | $3.0B |
| Net Debt | $4.1B |
| Equity Value | $13.6B |
| Shares Outstanding | 154.3M |
| Implied Share Price | $88 |
| Current Share Price | $79 |
| Implied Upside/(Downside) | +11.3% |
Valuation Summary
$88.10
Implied Price
$79.13
Current Price
+11.3%
Upside/Downside
6.7%
WACC
AKAM Peer Valuation Analysis
Relative valuation based on comparable company trading multiples
Peer Valuation Analysis
Fair Value Range Analysis
Based on median multiples from 9 peer companies in Technology
P/E Ratio
$95.01
+20.1%
Peer Median: 31.7x
EV/EBITDA
$204.14
+158.0%
Peer Median: 23.6x
P/S Ratio
$174.89
+121.0%
Peer Median: 6.4x
Interpretation: Each multiple provides a different perspective on fair value. Consider which multiple is most relevant for AKAM's business model and current situation.
Multiple Comparison
| Multiple | AKAM Current | Peer Median | Peer Average | Premium/Discount | Assessment |
|---|---|---|---|---|---|
| P/E Ratio | 26.4x | 31.7x | 29.3x | -16.7% | Fair Value |
| EV/EBITDA | 12.4x | 23.6x | 20.5x | -47.4% | Undervalued |
| P/S Ratio | 2.9x | 6.4x | 7.2x | -54.8% | Undervalued |
Peer Companies
Click any company to view their valuation
| Company | Market Cap | P/E Ratio | EV/EBITDA | P/S Ratio |
|---|---|---|---|---|
| $23.49B | 31.7x | 31.3x | 5.0x | |
| $25.23B | 32.4x | 23.6x | 16.0x | |
| $16.60B | 621.8x | 276.6x | 6.4x | |
| $20.02B | 0.0x | 94.8x | 4.4x | |
| $19.62B | 0.0x | 0.0x | 9.8x | |
| $11.57B | 26.4x | 12.4x | 2.9x | |
| $2.57B | 26.6x | 14.7x | 3.2x | |
| $2.28B | 0.0x | 115.6x | 10.3x | |
| $73.73B | 0.0x | 0.0x | 20.3x |
AKAM Graham Number
Benjamin Graham's conservative valuation formula for defensive investors
Input Data
| EPS (TTM) | $3.00 | Latest 10-K |
| Book Value per Share | $31.61 | Latest 10-K Balance Sheet |
| Graham Constant | 22.5 | Benjamin Graham's formula |
Graham Number Result
$46.16
Intrinsic Value
$79.13
Current Price
-41.7%
Upside/Downside
Confidence: High
Conservative value investing approach
Calculation Breakdown
Formula:
√(22.5 × EPS × BVPS)
Step 1: Multiply constant by EPS
22.5 × 3.00 = 67.42
Step 2: Multiply by Book Value per Share
67.42 × 31.61 = 2130.99
Step 3: Take square root
√2130.99 = 46.16
Graham Number Result:
$46.16
AKAM Graham Intrinsic Value
Growth-adjusted intrinsic value with two formula variants
Formula Selection
V = EPS × (8.5 + 2g)
Graham's original P/E shortcut for growth, no interest-rate adjustment
V = [EPS × (8.5 + 2g) × 4.4] / Y
Graham's 1974 refinement: adds rate-environment sensitivity
Active Formula: Base-Growth
3.00 × (8.5 + 2 × 2.6%)
Input Data & Growth Assumptions
Current EPS (TTM)$3.00
Latest 10-K • 2024-12-31T00:00:00
Historical 5Y2.6%
Financial statements
Custom
%
Enter a positive growth rate estimate (0-50%)
Graham Intrinsic Value Result
$40.96
Intrinsic Value
$79.13
Current Price
-48.2%
Upside/Downside
Base Formula
Growth: 2.6%
AKAM Earnings Power Value (EPV)
Normalized earnings-based valuation for sustainable earning power assessment
Earnings Normalization
| Earnings Component | Amount ($B) | Description |
|---|---|---|
| Reported Earnings | 0.5 | Base earnings from financial statements |
| Normalized Earnings | 0.5 | Final normalized earning power |
One-time Items: Remove non-recurring gains/losses
Cyclical Adjustment: Normalize for economic cycle position
EPV Result
$43.27
EPV per Share
$79.13
Current Price
-45.3%
Upside/Downside
7.6%
WACC: 7.6% (calculated from market data)
Confidence: High
Normalized earnings approach
EPV Calculation Breakdown
Enterprise Value Calculation
| Normalized Earnings | $0.5B |
| Cost of Capital | 7.6% |
| Enterprise Value | $6.7B |
Per Share Value
| Enterprise Value | $6.7B |
| Shares Outstanding | 0.2B |
| EPV per Share | $43.27 |
WACC Components
| Cost of Equity | 9.1% |
| After-Tax Cost of Debt | 3.5% |
| Equity Weight | 72.5% |
| Debt Weight | 27.5% |
| WACC | 7.6% |