CFRA Maintains Buy Recommendation On Shares Of Akamai Technologies, Inc.

We trim our target price to $103 from $132, on a P/E of 16x our NTM EPS view of $6.42, above its three-year historical average on rising momentum in its Security and Compute businesses. We cut our 2024 EPS view to $6.38 from $6.76 and drop our 2025 EPS forecast to $6.96 from $7.49. AKAM posted Q1 revenue of $987M, missing consensus by $2.18M, and non-GAAP EPS of $1.64 beat by $0.03. Security revenue accelerated 21% Y/Y (vs. 6.4% in Q1 2023), while Compute revenue increased 25% Y/Y. Compute registered strong momentum from rapid growth in customer count and uptake of new cloud computing solutions, up more than 4x on a year-over-year basis. Security saw continued strength with Zero Trust, its Guardicore segmentation solution, and Akamai API security. However, Content delivery was weaker than expected from slower traffic growth and cost optimization efforts with a large social media customer. We lower our full-year revenue estimate from further projected declines in Content Delivery revenue.

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