AKAM
Akamai Technologies, Inc.
$147.23
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 160.0% above fair value
You pay
$147.23
Bear
$0.00
Fair
$56.62
Bull
$258.43
Bear
$0.00
-100.0%
4% stage 1 growth, 11% discount
Fair
$56.62
-61.5%
7% stage 1 growth, 11% discount
Bull
$258.43
+75.5%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
76.5x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $158.31 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $56.62 per share.
Warnings
Stock-based employee pay equals 102% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $158.31 (from 52 analysts). Our estimate is 99% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions