What Happened:
Shares of web content delivery and security company Akamai (NASDAQ:AKAM) jumped 7.18% in the after-market session after the company reported a 'beat and raise' first quarter. Revenue, operating income, adjusted EBITDA, and earnings per share (EPS) all beat Consensus estimates. However gross margin deteriorated and free cash flow declined compared to recent quarters. Regardless, revenue guidance for the next quarter came in above Consensus. Additionally, the company increased full year guidance at the midpoint for revenue, operating margin, and EPS. This was a solid quarter. After the initial pop the shares cooled down to $82.50, up 4.48% from previous close.
What is the market telling us:
Akamai's shares are not very volatile than the market average and over the last year have had only 4 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Akamai is down 2.91% since the beginning of the year, and at $82.50 per share it is trading 19.7% below its 52-week high of $102.74 from June 2022. Investors who bought $1,000 worth of Akamai's shares 5 years ago would now be looking at an investment worth $1,080.
Is now the time to buy Akamai? Access our full analysis of the earnings results here, it's free.