1/3/25 - $akam - taking another look. dead $ in '251/3/25 :: VROCKSTAR :: NASDAQ:AKAM
taking another look. dead $ in '25
- wrote about NYSE:S earlier today, it's not "obvious" and there's some hair there but it's interesting. more of a trade.
- got me looking to refresh my "cyber pandemic" list of about 20 names to see what's changed in the last 6 months as we turn the leaf into '25 as i think this sector could become hawt once again
- rn NASDAQ:PANW is the NASDAQ:NVDA , but it's quite expensive (for good reason), other names like NYSE:NET are HQ and would be great dip-buys but the bar is simply too high when i compare to stuff in semis (like NYSE:TSM and NASDAQ:NVDA that are cash monster moats and trade a helluva lot cheaper). and next in line are probably NASDAQ:ZS which i'd eye perhaps at curr levels and should write up shortly and NASDAQ:OKTA (but where in okta's case, growth is a bit more meh, but nonetheless think they've got a lock on identity going fwd). i digress...
- so back to $akam. first.. when we look v. QQQ pair (type "AKAM/QQQ" in trading view), you can see over the long-term (look at monthly bars) this thing has simply faded. it's not been good money esp on a single-name basis when u could have just owned Q's. same when you compare w/ the panw, net, zs complex from above. and there's no real stabilization here either in the trend. tough.
- on a fundamentals basis, there are a lot of factors to watch for in the coming results, but none in particular that will immediately re-rate the stock and send it popping beyond M&A (which IMO is a nice kicker, but not worth buying a stonk for unless it's trading below liquidation value - which this one is not). they've made a lot of M&A in the past years, have some interesting solutions... but ultimately seems like they're trying to find their footing still in a difficult CDN go-forward and where their cyber offer is not a leader.
- so when you consider MSD++ growth (top line/ EPS), net debt (and not a small amount - nearly 3 bn on a 14 bn mkt cap name... means any "down" moves does little to really improve the valuation (like a bit net cash company would be). in other words, FCF yield here with mediocre growth is ~6% which is "fine" maybe cash+, but even 15% lower only takes you almost to 7% and you'd need -25% off on equity to get closer to 8%. even still... if stonk goes -25%... beyond trading the dip, would we want to own it? and if stonk rips with cyber maybe 10-15% from here... are we keeping it or trading for the faster horses?
- pt is, this isn't a biz that has clear catalysts, valuation is in no man's land w/ not so great cap structure (which usually hurts tech businesses that aren't big growers, all else equal), so i don't see the pt of owning it vs. some of the alternatives.
gl to the holders, but this one has a trigger for me to re-evaluate at $70 and even still, whatever brings us there... might mean there are better deals elsewhere (likely).
V
