What happened

Shares of Akamai Technologies (NASDAQ:AKAM) rose 12.6% in the first half of 2018, according to data from S&P Global Market Intelligence. It was a bumpy ride that seemed destined for even greater gains, but Akamai investors aren't complaining -- share prices have soared 54% higher over the last 52 weeks.

So what

In March, Akamai announced a shareholder value program in cooperation with activist investor firm Elliott Management. The provider of cloud-based data delivery tools and services added two new board seats, occupied by Elliott representatives and bringing the number of board seats up to 13.

With Elliott's hand-picked names close at hand, Akamai sketched out an ambition to double the company's operating margins to 30% in 2020. The announcement also introduced a new $750 million share buyback authorization and a promise to return "a substantial percentage of free cash flow" to shareholders over the next few years. Share prices surged 5% higher the next day.

The good times kept on rolling as Akamai extended its streak of consecutive earnings surprises to seven while a slew of analysts boosted their target prices on the stock.

Businessman in the starting position on an Olympic-style running track.

Image source: Getty Images.

Now what

Akamai's step lost some of its spring in late June where the company reduced the high end of its full-year guidance targets by a couple of percent. Currency exchange headwinds are hurting Akamai's top and bottom lines by a small but measurable amount. Reacting to this update, Akamai shares fell 9.5% lower in a seven-day span. Before that drop, Akamai's shares were trading more than 25% higher year to date.

Elliott's involvement is hardly surprising, given Akamai's sliding earnings and cash profits in recent years. Bringing an activist investor that close to the vest is often seen as a first step toward finding a buyer for the entire company, so the recent share prices most likely have some buyout speculation baked in.

This is a high-quality company with bright long-term prospects, but the goal of doubling its operating margins underscores how far from perfection Akamai stands now. And the stock is trading at a nosebleed-worthy 60 times trailing earnings, or 25 times free cash flow. Don't expect any huge short-term gains from this plateau, but patient investors with a long-term mindset could still find Akamai's shares interesting today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.