Akamai Technologies, Inc. (AKAM) DCF Valuation
TGM's two-stage DCF values Akamai Technologies, Inc. (AKAM) between $57.87 and $143.69 depending on assumptions, with a base case of $90.89. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$132.46 is justified only if free cash flow grows about +12.8% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 2.9%/yr | 8.5% | $57.87 |
| Base case | 5.9%/yr | 7.5% | $90.89 |
| Optimistic | 8.9%/yr | 6.5% | $143.69 |
| Analyst DCF (FMP) | independent reference — different model | $160.69 | |
Current Price
$132.46
Market-Implied Growth
+12.8%/yr
vs +6.4% 5Y actual
Model Scenario Range
$57.87 – $143.69
model output — not a price target
AKAM DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for AKAM (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $757.8M · 0.15B shares · net debt $4.7B
Estimated Fair Value
$107.15
-19.1% vs $132.46
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.9%/yr FCF growth and 10-year horizon fixed. Green = above today's $132.46; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $158 | $178 | $205 | $243 | $300 |
| 6.5% | $118 | $129 | $144 | $163 | $187 |
| 7.5% | $91.10 | $98.40 | $107 | $118 | $131 |
| 8.5% | $72.23 | $77.10 | $82.77 | $89.48 | $97.53 |
| 9.5% | $58.15 | $61.54 | $65.43 | $69.91 | $75.13 |
About Akamai Technologies, Inc.
Akamai Technologies, Inc. (AKAM) is a leading global provider of cloud services, specializing in the secure delivery, optimization, and protection of online content and business applications across the internet. The company's primary focus involves offering sophisticated cloud-based solutions designed to shield digital infrastructure, websites, applications (including APIs), and end-users from a wide array of cyberattacks and online threats, all while simultaneously enhancing performance. Akamai further excels in accelerating web and mobile experiences, facilitating dynamic and highly responsive websites and applications. Its extensive media delivery offerings encompass seamless video streaming and player services, efficient game and software distribution, robust broadcast operations, authoritative Domain Name System (DNS) resolution, and comprehensive data analytics. Additionally, Akamai provides cutting-edge edge compute solutions, empowering developers to deploy and run their code directly at the network's edge for improved efficiency and reduced latency. The company also extends its expertise to telecommunications carriers, offering specialized services such as advanced cybersecurity protection, parental controls, resilient DNS infrastructure, and content delivery solutions. To ensure client success, Akamai offers a full suite of support services to assist with the seamless integration, configuration, optimization, and ongoing management of its diverse product portfolio. Akamai distributes its solutions through both its dedicated direct sales and service organizations and an extensive network of channel partners. Founded in 1998, Akamai Technologies, Inc. is headquartered in Cambridge, Massachusetts.
- Sector
- Technology
- Industry
- Software - Infrastructure
- CEO
- F. Thomson Leighton