- Akamai Technologies, Inc AKAM clocked 6% revenue growth in the second quarter to $903 million, beating the consensus of $898 million. Adjusted EPS of $1.35 beat the consensus of $1.31.
- Security and compute revenue represented most of the revenue in the second quarter and grew 26% Y/Y.
- Needham analyst Alex Henderson reiterated a Hold rating on Akamai.
- He thought Akamai had done a solid job of addressing currency and macro headwinds in its guidance but also noted that the risk to its most robust growth engine, International growth, remains high.
- Domestic growth continues to be around 3%-6%.
- AKAM looks challenged given its international exposure and slowing Security business.
- RBC analyst Rishi Jaluria reiterated Outperform and cut the price target from $115 to $110.
- AKAM reported disappointing 2Q results, with incremental FX and delivery headwinds leading to a reduced 2022 guide, he noted.
- He highlighted that delivery traffic will likely be muted for several quarters and, to reduce costs, Akamai is turning away some customers with extreme peak traffic.
- He also emphasized encouraging Linode commentary.
- He also stressed that security deceleration suggested a continued slowdown in more established products.
- He added that the guide did not assume an improving macro, and commentary suggested a worsening environment in some markets (e.g., Europe).
- KeyBanc analyst Thomas Blakey reiterated Overweight and cut the price target from $123 to $116.
- The re-rating reflected macro/slower traffic, FX, and aligned pricing actions.
- Morgan Stanley analyst Keith Weiss cut the price target from $110 to $102 and reiterated an Equal Weight stating that the company's solid Q2 results with weaker than expected guidance underscores the shifting macro environment.
- Weiss noted that mounting headwinds and organic growth deceleration hurt the total return equation in the near term.
- DA Davidson analyst Rudy Kessinger slashed the price target to $115 from $125 but reiterated a Buy.
- Kessinger noted Akamai's Guardicore and Linode are showing nice traction and will put upward pressure on organic growth.
- Price Action: AKAM shares traded higher by 0.83% at $95.87 on the last check Wednesday.
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