Akamai Continues to Defy Analyst Worries

Akamai (Nasdaq: AKAM) reports 40%+ growth and announces strong forecast, analysts worry.It’s the same old story, and one that I believe will ultimately reward AKAM shareholders. I first made AKAM a SmartGuyStocks pick in August, after the company reported stellar earnings yet got crushed due to unfavorable analyst comments.

At that time, a variety of analysts bemoaned AKAM’s future, insisting that the days of fast growth and high profit margins were over due to major competition. Later that month, those analysts smiled with glee as competitor Limelight announced a new deal with Microsoft.

But rather than signaling the end of AKAM’s growth run, these moments were actually great opportunities to gobble up shares on the cheap. Despite all the predictions of doom and gloom, CEO Paul Sagan stepped up to the podium last week and announced yet another brilliant quarter of explosive growth, high margins, and low churn. Said Sagan, “We were very pleased with our third quarter results and the demand we saw for our services, especially as we experienced increased momentum during September.” Not exactly music to the ears of naysayers.

Yet some people just never learn. Several analysts came out again and reiterated their concerns about increased competition. As long as the demand for digital content delivery continues to grow and AKAM continues to execute as the industry leader, the analysts can agitate all they want. Like its fellow Boston- area residents, the New England Patriots, you can count on Akamai to regularly deliver spectacular results.

Disclosure: SmartGuyAB is long AKAM