Dorty Buy - January 3, 2011 Mark Kelleher (617) 752-1745

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90 SOUTH SEVENTH STREET SUITE 4300 MINNEAPOLIS, MINNESOTA 55402-4108 (612) 376 – 4000 (800) 328 – 4000 Member SIPC & FINRA Business Description: Akamai Technologies is a leading provider of services and solutions that improve the delivery of content and business processes over the Internet. Customers that utilize Akamai’s platform are able to enhance online performance while minimizing the costs associated with the build-out of their own infrastructure. Formed in 1998, the company is located in Cambridge, MA. Our initiation report can be found here. January 3, 2011 Mark Kelleher (617) 752-1745 mkelleher@doughertymarkets.com A KAMAI T ECHNOLOGY (AKAM) B UY - $47.05 Enterprise Infrastructure PLEASE REFER TO DISCLOSURES ON PAGES 4 AND 5 FOR IMPORTANT INFORMATION Raising rating from Neutral to Buy Changes: Rating from Neutral to Buy FINANCIAL SUMMARY EPS 2008 2009 2010 E 2011E Price $47.05 Mar $0.41 $0.43 $0.35 A $0.38 52-Week Range $23.40 - $54.39 Jun $0.41 $0.40 $0.34 A $0.38 12-Month Target $59.00 Sep $0.40 $0.38 $0.36 A $0.40 Shares O/(mil) 191.3 Dec $0.44 $0.46 $0.39 E $0.46 Market Cap ($mil) 8,999 CY $1.66 $1.66 $1.44 E $1.62 Avg. Daily Vol 4,344,497 P/E 28.4 28.3 32.8 29.0 Inst. Ownership 86.7% Est. 3 Yr EPS Growth 20% Revenue 2008 2009 2010 E 2011E Mar $187.02 $210.37 $240.03 A $282.00 Jun $194.00 $204.60 $245.32 A $290.00 Sep $197.35 $206.50 $253.55 A $300.00 Dec $212.55 $238.31 $280.00 E $330.00 CY $790.92 $859.77 $1,018.90 $1,202.00 Q4 report date: Feb 9, 2011 Key Points: Upgrading from Neutral to Buy. Since our initiation of coverage of Akamai Technologies on November 30 th Weakness since analyst day. AKAM stock hit a four year high of $54 on December 8 , AKAM stock has declined approximately 10%, and now offers 26% upside potential to our $59 price target. We are therefore changing our recommendation from Neutral to Buy based on valuation. th Analyst day . While not revising Q4 guidance up during its analyst day as some analysts had predicted, Akamai did present a fairly impressive update on its competitive position in the Internet infrastructure market. From CDN to value-added applications, the company deploys a formidable server infrastructure that dwarfs competitive offerings. Akamai is a company that benefits from Internet growth, and we see no impediment to either the Internet or Akmai’s growth prospects. , the day before the company’s analyst day. We believe the expectation of raised Q4 guidance going into the analyst day, and the fact that AKAM did not increase its Q4 guidance, is the primary driver of stock weakness over the past three weeks. Adding to investor caution is the apparent loss of Netflix as a CDN customer to Level 3, as well as an appeals court ruling in favor of CDN competitor Limelight in a patent dispute. In addition, a renewed debate on ‘net neutrality’ may also have added to investor caution.
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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.

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Dorty Buy - January 3, 2011 Mark Kelleher (617) 752-1745

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