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Unformatted text preview: North America Equity Research 10 December 2010 Akamai Technologies, Inc. Neutral AKAM, AKAM US Analyst Day Takeaways Price: $52.50 Price Target: $56.00 Software Technology Sterling Auty, CFA AC (1-212) 622-6389 email@example.com Lauren Choi (1-212) 622-6102 firstname.lastname@example.org Saket Kalia, CFA (1-212) 622-6477 email@example.com J.P. Morgan Securities LLC 20 30 40 50 $ Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Price Performance YTD 1m 3m 12m Abs 107.2% 1.8% 4.7% 107.7% Akamai Technologies (AKAM;AKAM US) 2009A 2010E 2011E EPS - Non GAAP ($) Q1 (Mar) 0.43 0.35A 0.39 Q2 (Jun) 0.40 0.34A 0.40 Q3 (Sep) 0.38 0.34A 0.41 Q4 (Dec) 0.46 0.38 A 0.44 FY 1.67 1.42 A 1.64 Source: Company data, Bloomberg, J.P. Morgan estimates. Company Data Price ($) 52.50 Date Of Price 09 Dec 10 52-week Range ($) 54.65 - 24.50 Mkt Cap ($ mn) 10,041.73 Fiscal Year End Dec Shares O/S (mn) 191 Price Target ($) 56.00 Price Target End Date 31 Dec 11 See page 8 for analyst certification and important disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Akamai hosted its annual investor day yesterday in Boston. The day was largely spent on an overview of their five areas of focus: cloud, security, mobile, video and analytics. The company did not update guidance as some may have expected and kept their long term financial model the same. They did give a new long term goal of reaching $5B in the next decade which effectively is on average 17% yoy growth per year, but said they would try to get there as quickly as possible leaving open the potential for even faster growth. No update on 4Q or 2011 guidance: Company straight off the bat said that they are not updating guidance, which we believe some had expected them to given they gave guidance last year. Most of the news of late about ecommerce for the holidays has been positive so we believe expectations for 4Q10 are high. $5B-$7B revenue target for the next decade indicates 17% yoy growth: Akamai went over their plan to reach $5B of total revenue in the next decade. The company expects that the Media and Entertainment (M&E)(~$400M business), e-commerce (~$200M), enterprise cloud business (B2B), and high tech (~200M) can add $2B, $1B, $1B, $1B with an additional $2B of additional add ons (by way of mobile, security and data). Not expecting an end to aggressive price cuts in media business: Within M&E, even if pricing is decreasing by 95%, the company believes that they can still reach their $2B target given the expected growth in volume levels with more and more video consumption coming from the Internet....
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This note was uploaded on 02/05/2012 for the course FINANCE 101 taught by Professor George during the Spring '11 term at University of Phoenix.
- Spring '11