Head-To-Head Analysis: Akamai Technologies (NASDAQ:AKAM) and Visa (NASDAQ:V)

Akamai Technologies (NASDAQ:AKAM) and Visa (NYSE:V) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for Akamai Technologies and Visa, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Akamai Technologies 1 5 11 0 2.59
Visa 0 1 23 0 2.96

Akamai Technologies currently has a consensus target price of $93.56, suggesting a potential downside of 1.67%. Visa has a consensus target price of $206.00, suggesting a potential upside of 2.96%. Given Visa’s stronger consensus rating and higher possible upside, analysts plainly believe Visa is more favorable than Akamai Technologies.

Valuation and Earnings

This table compares Akamai Technologies and Visa’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Akamai Technologies $2.71 billion 5.66 $298.37 million $2.76 34.47
Visa $22.98 billion 17.15 $12.08 billion $5.44 36.78

Visa has higher revenue and earnings than Akamai Technologies. Akamai Technologies is trading at a lower price-to-earnings ratio than Visa, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Akamai Technologies has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Visa has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Institutional and Insider Ownership

89.0% of Akamai Technologies shares are owned by institutional investors. Comparatively, 81.1% of Visa shares are owned by institutional investors. 2.4% of Akamai Technologies shares are owned by company insiders. Comparatively, 0.2% of Visa shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Akamai Technologies and Visa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Akamai Technologies 15.98% 16.76% 10.03%
Visa 52.57% 42.57% 17.40%

Summary

Visa beats Akamai Technologies on 12 of the 14 factors compared between the two stocks.

Akamai Technologies Company Profile

Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally. It provides cloud security solutions, including Web Application Protector to safeguard Web assets from Web application and distributed denial of service; Kona Site Defender, a cloud security solution; Bot Manager to identify bots and categorize bots based on business or IT impact; Fast DNS, which translates human-readable domain names into numerical IP addresses; Prolexic Routed to protect Web- and IP-based applications; and Client Reputation that assigns risk scores to malicious IP address and enables customers to take action on individual clients. The company also offers enterprise security solutions, including Enterprise Application Access that enables remote access to applications; and Enterprise Threat Protector to enable enterprise security teams to identify, block, and mitigate targeted attacks. In addition, the company provides Web and mobile performance solutions, such as Ion, a suite of intelligent performance optimization tools and controls; Dynamic Site Accelerator to accelerate and secure interactive Websites; Image Manager that automatically optimizes online images; CloudTest to conduct load testing and other analysis of Websites in a pre-production environment; and mPulse that provides real-time Website performance data to provide insight about end-user experiences on a Website. Further, it provides carrier solutions, including Aura Managed CDN, intelligent recursive DNS platforms, and security and personalization services; and media delivery solutions, such as adaptive delivery, download delivery, media services live, and media analytics, as well as NetStorage, a cloud storage solution. The company sells its solutions through direct sales and service organization; and channel partners. The company was founded in 1998 and is headquartered in Cambridge, Massachusetts.

Visa Company Profile

Visa Inc. operates as a payments technology company worldwide. The company facilitates commerce through the transfer of value and information among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a processing network that enables authorization, clearing, and settlement of payment transactions; and offers fraud protection for account holders and assured payment for merchants. In addition, the company offers card products, as well as value-added services. It provides its services under the Visa, Visa Electron, Interlink, V PAY, and PLUS brands. Visa Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

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