Analyst Note| Matthew Dolgin, CFA |
Akamai’s first-quarter results were within the company’s guidance, but the firm saw business softening toward the end of the quarter. Combined with macroeconomic and geopolitical issues that the company now expects will dent results at least through 2022, the firm reduced its full-year guidance on the top and bottom lines. The business softening is unsurprising as the world moves past the pandemic, and our long-term view of the firm has not changed. Despite the stock dropping more than 10% in after-hours trading, shares remain overvalued relative to our $85 fair value estimate, which we are maintaining.