Before the Call: Look Alive, Akamai

Between Gootube's ginormous growth and the insatiable appetite for Apple's Web-wielding iPhone, the Internet has never been more popular. And it's still growing by 75% a year! Will Web content delivery king Akamai (Nasdaq: AKAM  ) , facing up-and-coming competition from Limelight (Nasdaq: LLNW  ) , be able to cash in on that growth? We'll know more when Akamai reports earnings tomorrow.

But in these few hours before we find out if it's prime time for Akamai, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 60,000 investors for their views on well over 4,000 firms, Akamai among them. Here's what Fools have to say about the company.

Up or down?
More than 1,309 investors have weighed in on Akamai, including yours truly, who made it a pick for our Rule Breakers service two years and more than 200% ago.

And I still own shares. Why? Gootube. Web 2.0. Globalization. You name it. We're becoming an increasingly digital species that is dependent on the Web being an efficient delivery vehicle, which it isn't.

Sure, the Web is reliable; it's always on. Efficiency is different. Efficiency means never losing an e-mail to the ether. Or having a Web page time out just as you enter a password. Akamai addresses these issues and more, and massive growth has followed. I believe this will continue.

Sadly, our CAPS contingent isn't as bullish as I am. Only 93% of our naturally sunny investors think the stock is a buy at these levels. And only 89% of our best stock pickers -- the CAPS All-Stars -- are willing to go long, resulting in a three-star rating for Akamai.

How unsurprising. Almost half of Akamai's bandwidth-reselling peers also earn the three-star salute:

Bandwidth Group

CAPS Rating (out of 5)

Akamai Technologies

***

Alltel (NYSE:AT)

***

Comcast (NASDAQ:CMCSA)

***

Compania de Telecommunicaciones (NYSE:CTC)

***

Citizens Communications (NYSE:CZN)

***

NTT DoCoMo

***

Telecom Corp. of New Zealand

***

Radyne

***

Verizon Communications (NYSE:VZ)

***

Source: Motley Fool CAPS.

Wall Street vs. Main Street
The white-shoe pros see it differently. Analysts forecast 33% annual growth to 2012, and 14 of 15 of the Wall Streeters following Akamai in CAPS rate it "outperform." Top bull WR Hambrecht, a CAPS All-Star in its own right, earned its nine-point margin over the market by waxing bullish in June, when everyone else was selling.

Bull pitch
The Professor Positives among Akamai investors say that the stock "has been a steamroller" and that it "tracks the growth of the Internet." Others say that Akamai's acquisitions of Red Swoosh and Netli could blunt any incursion from peer-to-peer technologies, preserving the competitive advantage that, today, has Akamai controlling 60% of the content delivery market.

Bear pitch
Meanwhile, the Sally Sourpusses say that Akamai's 128 trailing P/E is "richly valued" and that it faces "substantial competitive battles" and "pricing pressure." Others call Akamai's technology "interesting, but not particularly revolutionary." Don't tell that to the patent holders at MIT, bucko.

Fool on ... and on, and on, and on
Want more? To discover the Fools behind the words, to examine their records, and to find further Foolish coverage of Akamai, just click here.

Akamai is one of 11 stocks in the Rule Breakers portfolio to have at least doubled. Discover the names of the other 10 with a 30-day free trial. There's no obligation to subscribe.

Fool contributor Tim Beyers, who is ranked 2,625 out of more than 60,000 participants in CAPS, owned shares of Akamai at the time of publication. Find Tim's portfolio here and his latest blog commentary here. Citizens Communications is an Income Investor pick. The Motley Fool's disclosure policy is the Big Kahuna on Wall Street. Cowabunga, baby.


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