Two Ways To Play: All Eyes On Akamai
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Shares of Akamai Technologies (AKAM), provider of global delivery services for Internet content, plunged nearly 7% today. According to Bloomberg, analysts at Goldman Sachs placed the stock on its "Americas Sell List" due to new competition from larger rivals.
Analyst Derek Bingham cut his 2008 and 2009 earnings estimate for the company, stating Akamai would likely be forced to lower prices with bigger competitors such as AT&T (T) moving into the market. He stated in a note that AT&T stashed away $70 million this year for equipment necessary to compete with Akamai and competitor Level 3 Communications (LVLT).
Bingham went on to value Akamai at $33 per share and expects the company to earn $1.69 a share in 2008, down 3 pennies from his previous estimate.
Professor Fil Zucci mentioned Akamai recently in Quick Hits: All About Akamai.
From the Bull Pen: Akamai has been the recipient of many a positive mention here at the 'Ville. Those still bullish might use this weakness as an entry. Support levels can be identified near $35 and $30.
From the Bear Cave: Bears might consider the downside on AT&T (T) and Verizon (VZ) with entry levels near $40.
Have a great night!
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