US Equities Analysis

AKAM — Akamai Technologies

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 10.61%
Profit Margins 10.2%
Return on Equity 9.17%
Return on Assets 3.39%
Free Float 0.14B
Short Int % Utilisation 15.8%

2.2 Growth

Metric Value
Revenue Growth 5.8%
Free Cash Flow 0.7B
EBITDA 20.78 (Ratio)
Enterprise Value 23.83B
EV/Revenue 5.59
EV/EBITDA 20.78

Revenue growth of 5.8% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 98.37%
Risk / Std Dev (Ann.)* 57.91%
1-Year Price Return* 67.95%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $124.99
52-Week Range $70.82 – $165.45
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $4.21B
Prior annual revenue $3.99B
EBIT $633.16M
Tax rate 25.00%
NOPAT = EBIT × (1 − tax rate) $474.87M
Forecast start-growth basis 5.44%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $474.87M
Add: depreciation & amortisation $708.61M
Less: capital expenditure -$819.50M
Less/(add): working-capital cash-flow movement -$173.08M
Current unlevered FCFF $190.91M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 5.44% $500.69M $747.14M -$864.06M -$182.49M $201.29M $195.23M
2 4.70% $524.24M $782.28M -$874.09M -$191.07M $241.36M $220.23M
3 3.97% $545.04M $813.32M -$876.96M -$198.65M $282.75M $242.72M
4 3.23% $562.67M $839.63M -$872.48M -$205.08M $324.75M $262.25M
5 2.50% $576.74M $860.62M -$860.62M -$210.20M $366.54M $278.46M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.65
Cost of equity 8.26%
Pre-tax cost of debt 0.60%
WACC 6.30%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $9.89B
Implied terminal EV / EBITDA 6.07x
Terminal value as % of enterprise value 85.88%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $1.20B
Present value of terminal value $7.29B
Indicated enterprise value $8.49B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $8.49B
Less: gross interest-bearing debt $5.68B
Add: cash and equivalents $1.19B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $4.00B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 147,023,000.00
Share-count basis reported diluted weighted-average shares
Current market price $117.73
DCF indicative value per share $27.21
Indicative value vs. market price -76.89%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 3/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:21:35.390089 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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