This is a step-by-step stock review to answer the question, is Akamai (AKAM) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Akamai (AKAM) stock a good buy?
1. Akamai Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 1998: Established by Dr. Tom Leighton and Danny Lewin, originating from MIT’s Computer Science department.
- Early Innovation: Pioneered content delivery network (CDN) technology, enhancing internet speed and reliability.
- IPO in 1999: Went public, quickly becoming a leading internet infrastructure company.
- Global Expansion: Built a vast network of servers, now with over 300,000 servers in more than 130 countries.
- 2000s Growth: Acquired companies like Speedera Networks and Prolexic Technologies to expand services and capabilities.
- Enhanced Security: Introduced advanced web security solutions to protect against DDoS attacks, malware, and data breaches.
- Cloud Services: Expanded into cloud computing and edge computing, providing scalable solutions for businesses.
- Streaming Services: Became a key player in live and on-demand video streaming, supporting major events and broadcasters.
- Corporate Responsibility: Focused on sustainability with initiatives to reduce carbon footprint and improve energy efficiency in data centers.
- Innovation Leadership: Continues to innovate with developments in AI, machine learning, and IoT solutions.
- Customer Focus: Serves diverse industries, including media, finance, healthcare, and e-commerce, ensuring fast and secure online experiences.
- Mission Statement: Dedicated to making the internet fast, reliable, and secure for businesses and consumers worldwide.
Akamai remains a leader in internet technology, committed to enhancing the digital experience with innovative, secure, and efficient solutions.
2. MOS (Margin of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: watch
- Score: 50/100
- MOS: 27%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Akamai (AKAM) makes money:
- Content Delivery Services: Akamai speeds up and secures web content delivery through CDN services.
- Cloud Security Solutions: Protects websites and apps from cyber threats like DDoS attacks and data breaches.
- Edge Computing: Provides efficient edge computing solutions for faster processing and storage closer to data sources.
- Web and Mobile Performance: Optimizes website and app performance to enhance user experience and engagement.
- Media Delivery: Sells solutions for video streaming, live events, and on-demand media delivery to broadcasters.
- Enterprise Solutions: Tailors services for enterprises, including secure application access and network performance monitoring.
- Software and API Protection: Safeguards software and APIs from attacks and unauthorized access.
- Data Analytics: Offers insights into website performance, user behavior, and security threats.
- Subscription Models: Generates revenue through subscription-based services and long-term contracts.
- Partnerships and Integrations: Collaborates with tech partners to integrate solutions into IT ecosystems.
- Professional Services: Provides consulting, implementation, and managed services.
- IoT Solutions: Secures and optimizes IoT devices and applications.
Akamai leverages these diverse revenue streams to maintain its leadership in internet technology, focusing on enhancing performance, security, and reliability for its customers.
Here are a few of the other companies that Akamai (AKAM) has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Nominum
- Janrain
- Exceda
- ChameleonX
- Instart
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Akamai (AKAM) stacks up against other companies.
- SPS Commerce, Inc.(SPSC) – 95
- Payoneer Global Inc. (PAYO) – 94
- Payoneer Global Inc. (PAYOW) – 94
- GigaCloud Technology Inc. (GCT) – 84
- Palo Alto Networks, Inc. (PANW) – 78
- Akamai Technologies, Inc. (AKAM) – 50
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
Frank Thomson Leighton’s tenure at Akamai saw several notable accomplishments:
- Content Delivery Network (CDN) Development: Leighton played a pivotal role in the development and expansion of Akamai’s globally distributed content delivery network, enhancing the speed and reliability of online content delivery for millions of users worldwide.
- Technological Innovation: Led efforts to innovate and improve Akamai’s network infrastructure and optimization algorithms, enabling faster and more efficient delivery of web content, streaming media, and online applications.
- Security Solutions: Spearheaded the development and integration of security solutions into Akamai’s platform, enhancing protection against cyber threats such as DDoS attacks and web application vulnerabilities.
- Global Expansion: Oversaw Akamai’s expansion into new markets and regions, establishing a strong international presence and increasing the company’s market share and revenue streams.
- Strategic Partnerships: Fostered strategic partnerships with major technology companies, content providers, and internet service providers (ISPs), expanding Akamai’s ecosystem and enhancing its service offerings.
- Thought Leadership: Positioned Akamai as a leader in the field of content delivery and internet infrastructure through thought leadership initiatives, research publications, and participation in industry conferences and events.
- Financial Performance: Contributed to Akamai’s sustained financial growth and profitability through effective management, strategic planning, and execution of business initiatives.
- Customer Satisfaction: Prioritized customer satisfaction and service excellence, earning Akamai a reputation for reliability, performance, and customer-centricity in the industry
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Akamai (AKAM) is 58/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Akamai (AKAM) stock a good buy?
Some of the top questions investors can have is Akamai (AKAM) stock a good buy or should I buy Akamai (AKAM) stock?
Akamai Technologies is a strong investment due to its leading position in content delivery, cybersecurity, and cloud services. The company benefits from the growing demand for secure and fast online experiences, providing critical services to businesses globally. Akamai’s robust financial performance, continuous innovation, and strategic acquisitions enhance its market presence and growth potential. However, consider risks such as market competition, technological changes, and cybersecurity threats. Evaluating Akamai’s financial health, market trends, and your investment strategy will help determine if it aligns with your portfolio goals.
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To truly know if Akamai is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
If you found this stock review interesting, you may also like this review on TransUnion.