Robert Blumofe, Chief Technology Officer at Akamai Technologies Inc . (NASDAQ:AKAM), disclosed the sale of 2,500 shares of the company's common stock. The transactions, executed on November 15, 2024, were made at a weighted-average price of $88.6076 per share, resulting in a total value of $221,519. Following this sale, Blumofe holds 19,510 shares directly. The sale was conducted under a Rule 10b5-1 trading plan, which Blumofe put in place earlier this year on March 10.
In other recent news, Akamai Technologies has emerged as the winning bidder for specific assets of the recently bankrupt Edgio. The acquisition, which includes customer contracts and non-exclusive license rights to Edgio's patent portfolio, is expected to close in the fourth quarter of 2024, pending court approval. This development is set to enhance Akamai's existing portfolio of security solutions and content delivery networks.
Additionally, Akamai has reported significant financial achievements, meeting revenue expectations for the third quarter. The company announced its first billion-dollar quarter with total revenue reaching $1.005 billion, a 4% increase year-over-year. Akamai's security revenue rose to $519 million and compute revenue grew by 28% to $167 million.
Financial services firm Baird has adjusted its stock price target for Akamai from $120 to $115, maintaining an Outperform rating. Despite challenges in the delivery business, Baird highlighted Akamai's security and compute segments, which are expected to continue experiencing double-digit growth.
Akamai has also announced a workforce reduction of 2.5% as the company transitions its focus towards cybersecurity and cloud computing solutions. The company's Q4 revenue projections are expected to be between $995 million and $1.020 billion, with full-year forecasts indicating 4% to 5% growth. The security sector is expected to grow by 15% to 17% in constant currency for the year 2024. Despite a projected 20-21% year-over-year decline in delivery segment revenue, Akamai has secured major contracts due to strong customer interest in security solutions.
InvestingPro Insights
As Robert Blumofe reduces his stake in Akamai Technologies Inc. (NASDAQ:AKAM), investors may find additional context in recent market data and analyst insights. According to InvestingPro, Akamai's stock is currently trading near its 52-week low, with a market capitalization of $13.14 billion. This recent insider sale comes at a time when the stock has experienced a significant downturn, with a one-month price total return of -14.46% as of the latest data.
Despite the recent stock performance, Akamai maintains a solid financial foundation. The company boasts a gross profit margin of 59.68% for the last twelve months as of Q3 2024, indicating strong pricing power in its core business. Additionally, Akamai's revenue growth stands at 5.92% over the same period, suggesting continued business expansion despite market challenges.
InvestingPro Tips highlight that management has been aggressively buying back shares, which could be seen as a vote of confidence in the company's long-term prospects. This buyback activity is particularly noteworthy given the stock's current valuation, which implies a strong free cash flow yield according to another InvestingPro Tip.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide valuable insights into Akamai's financial health and market position. These tips, along with real-time metrics, can help investors make more informed decisions in light of recent insider activity and market trends.
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