AKAM - Akamai's 20% CAGR In Security Services Boosts The Stock's Outlook.

2024-03-28 09:11:30 ET

Summary

• Akamai's performance has been inconsistent, with periods of outperformance and underperformance, mostly due to its business transition.
• The company is transitioning away from its content delivery business and focusing on security and compute, which are generating incremental revenue.
• Akamai's security segment has been successful, accounting for a growing share of overall revenue and offsetting declines in the legacy CDN segment. The segment is growing at a 20% CAGR.

Investment Thesis

While observing Akamai’s ( AKAM ) performance over the past twelve months, I noticed that the performance has been quite lumpy, with bubbles of outperformance and troughs of underperformance as can be seen in the chart below....

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