AKAM To Benefit From Multiple Growth Drivers
Analysts at Kaufman Brothers initiate coverage of Akamai Technologies Inc (NASDAQ: AKAM) with a "hold" rating. The target price for AKAM is set to $33.
“While we believe the company will benefit from multiple growth drivers (HD, ecommerce and cloud computing) and the worst of the media pricing declines are likely behind Akamai, we believe shares are fairly valued at current levels given our expectation for 10%-15% LT growth,” the analysts say. “Beginning in 2Q09, Akamai became more aggressive on pricing vs. competitors… We continue to expect very strong bit volume growth in the media sector, likely 50% plus driven by continued adoption of online video and move to HD, which we expect to outpace price declines in 2010,” the analysts mention.
“Akamai's core VAS include: Dynamic Site Solutions (i.e., caching ecommerce pages and objects); Application Performance Solutions (i.e., accelerating B2B applications over the Internet); and Advertising Decision Solutions (performance-based behavioral ad network). We continue to expect all three of the areas to remain in high demand in 2010. Additionally, Akamai faces much less competition for VAS solutions vs. content delivery which is more commoditized,” Kaufman Brothers adds.
