Content delivery network Akamai Technologies (AKAM) has been hitting its numbers. Time to get out now, say Goldman Sachs analyst Derek Bingham says in a note summarized by Barron’s editor Eric Savitz. Bingham also cut his 2008 EPS estimates to $1.69 from $1.72, and his 2009 estimate to $2.01 from $2.06. Savitz:
“Beyond valuation,” he added in a research note this morning, “we are also concerned about intensifying competition as private entrants proliferate and selected large network operators begin to eye the space.” He contends that most of the company’s 2,700 customers will be able to increase pressure on Akamai as contracts come up for renewal this year.
Those large network operators include Level 3 (LVLT), which has a growing CDN business, and AT&T (T), which is supposedly prepping its sales force for a big CDN push in Q3.
Akamai shares are down 7.4% this morning to $36.36. Smaller rival Limelight Networks (LLNW) isn’t doing much — up 0.7% to $2.89. Level 3 is up 9.9% to $3.46.
Disclosure: Content delivery network Panther Express is one of our AlleyCorp sister companies.
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