Tech stocks have all taken a dive this fall, but Akamai’s shares have taken a particular beating — down 75% since May. Why? Investors have worried about slower growth in the Web content delivery business, price wars, etc.
But Akamai (AKAM) must have said good things at its investor summit in Boston yesterday: Shares jumped 11% today — and were even up substantially before the market’s late-afternoon rally. Some notes from analysts:
- “We believe they can grow revenue and EPS by at least 10% through 2010, making the shares incredibly cheap here,” said Jefferies’ Katherine Egbert.
- FBR’s David Hilal says Akamai’s application acceleration services are “promising” and that it’s at the “early stages of adoption.”
- But he expects Akamai’s customers to adopt fewer add-on services during the downturn.
- So while reiterating his “market perform” rating, he lowered his 2009 revenue and EPS estimates. He now expects Akamai to post sales of $859 million next year, below consensus — and his previous estimate — of $890 million.