AKAM – Market expectations are for Uniform ROA to fade and management may have concerns about security features and Guardicore acquisition

January 14, 2022

  • Akamai Technologies, Inc. (AKAM) currently trades near corporate and historical averages relative to Uniform earnings, with a 23.2x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to fade to 13%, accompanied by 7% Uniform asset growth.
  • Meanwhile, analysts expect Uniform ROA to also compress to 13% in 2022, accompanied by 8% Uniform asset growth.
  • If sustained going forward, these levels would imply a stock price closer to $122, representing marginal 4% equity upside for the firm.
  • Moreover, the firm’s most recent earnings call suggests management may have concerns about security features and the Guardicore acquisition.

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