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.


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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