AKAM Stock Falls As Computer Security Misses, Guidance Below Estimates

Shares in Akamai Technologies (AKAM) fell as third quarter guidance for AKAM stock fell short of expectations.

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For the current September quarter, Akamai said it expects EPS in a range of $1.21 to $1.26 with revenue of $875.5 million at the mid-point of guidance. Analysts had estimated Q3 EPS of $1.30 on revenue of $902 million.

“We think AKAM stock looks challenged given its international exposure and slowing security business,” said Needham analyst Alex Henderson in a report.

The Cambridge, Mass.-based company said June-quarter earnings fell 5% to $1.35 an adjusted share. Akamai revenue climbed 6% to $903 million.

Analysts expected Akamai earnings of $1.31 a share on revenue of $899 million for the period ended June 30. A year earlier, Akamai earned $1.42 a share on sales of $853 million.

Akamai stock was down 2.3% to 92.90 in morning trading on the stock market today. AKAM stock had dropped 18% in 2022 at the Tuesday close.

AKAM Stock: Security Revenue Misses

Meanwhile, the company said Q2 earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 1% to $388 million, versus estimates of $386 million.

Further, the company said security product revenue, including acquisitions, rose 17% to $381 million vs. estimates of $391 million.

Heading into the Akamai earnings report, the stock had a Relative Strength Rating of 47 out of a possible 99, according to IBD Stock Checkup.

Biggest Provider Of CDN Services

Akamai is the biggest provider of content delivery network services that also increase the speed of e-commerce transactions and business software downloads.

In addition, Akamai has expanded into cybersecurity services.

Continuing an acquisition spree, Akamai in February acquired Linode for $900 million. Linode is a cloud computing infrastructure provider for businesses. The deal better positions Akamai versus Cloudflare (NET). Cloudflare stock jumped on its second-quarter earnings report.

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