We're living in the early days of the digital age, where massive bandwidth is a precious, precious commodity. Akamai Technologies (Nasdaq: AKAM) has one solution to that conundrum -- make the Net work more efficiently. Check out last quarter's results and then get back here for a quick look at the current situation. You're going to like what you see, even if the Street doesn't.

What Fools say:
Here's how Akamai's CAPS scoring rates against some of its peers and competitors:

Market Cap (millions)

Trailing P/E Ratio

CAPS Rating

VeriSign (Nasdaq: VRSN)

$7,520

181.0

**

Level 3 Communications (Nasdaq: LVLT)

$5,100

N/A

***

Akamai

$5,040

62.5

****

NeuStar (NYSE: NSR)

$2,230

28.2

****

Digital River (Nasdaq: DRIV)

$1,220

20.3

****

Data taken from Motley Fool CAPS on 02/05/08.

One bullish CAPS rating comes from SmartGuyStocks: "We've heard the 'commodity' and 'increased competition' worries for years now, and yet the company continues to deliver stellar growth. If you believe in the growth of online content delivery (and who doesn't), [Akamai] will continue to outperform."

The bears are scarce at the moment. One who ventured a pitch doesn't see any earnings growth happening. Allow me to rebut that grizzly concern right here.

What management does:
Despite a shrinking gross take, the bottom-line margins are improving. That's because of tight cost controls and growing interest payments from a strengthening balance sheet. And it looks like the earnings growth curve hit a positive inflection point in the fall -- let's see if that encouraging trend continues. No growth? Yeah, right.

Margins

6/2006

9/2006

12/2006

3/2007

6/2007

9/2007

Gross

79.5%

78.8%

78.0%

77.1%

75.8%

74.7%

Operating

21.4%

20.2%

19.4%

19.4%

20.1%

20.7%

Net

14.5%

14.4%

14.2%

14.3%

14.6%

15.2%

FCF/Revenue

20.6%

24.2%

17.5%

17.7%

14.9%

17.8%

Growth (YOY)

6/2006

9/2006

12/2006

3/2007

6/2007

9/2007

Revenue

48.5%

49.4%

51.4%

52.0%

51.2%

50.1%

Earnings

42.5%

41.9%

38.0%

42.0%

51.6%

58.4%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Amid all of these improving results, Akamai's stock price has lost more than 40% of its value in the last year. After failing to blow the average analyst's mind last summer, the shares took an immediate 25% fall that extended down a bit further. Mind you, that wasn't a miss -- just a solid, only slightly spectacular report. Back then, fellow Fool Tim Beyers figured that the stock was priced for 30% annual cash flow growth, and it's 20% cheaper than that today.

This doesn't make any sense, unless the Internet stops working tomorrow or Akamai's biggest customers, like Apple (Nasdaq: AAPL) and Nintendo (OTC BB: NTDOY.PK), cancel their contracts next week. Neither scenario is likely, as the world hungers for ever-richer online content and Akamai is just the company to distribute that. This growth story has hardly even begun yet, and you can still get in for cheap.

Akamai is a Motley Fool Rule Breakers recommendation, and Nintendo is a Motley Fool Stock Advisor pick. Soak in our analysts' money-making expertise with a free 30-day trial subscription to any newsletter you like. Or just sign up for a free CAPS account to hobnob with the other 83,000 Fools participating in the investor-intelligence database.

Fool contributor Anders Bylund is an Akamai shareholder, but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is the Punxsutawney Phil of financial forecasting.