Akamai (NASDAQ: AKAM) is set to publish its fiscal first-quarter earnings on Thursday, May 8, 2025, with analysts anticipating earnings of $1.57 per share on $1.01 billion in revenue. This would indicate a 4% year-over-year decrease in adjusted earnings and a 2% increase in sales compared to last year’s figures of $1.64 per share and $987 million in revenue. Historically, AKAM stock has tended to underperform after earnings announcements, having dropped 56% of the time with a median one-day decline of 10.1% and a maximum decline observed at 22%.
The company is showcasing resilience and adaptability by effectively utilizing growth in its cloud and security solutions segments to offset the decline in its traditional delivery business. With a current market capitalization of $12 billion, the company reported $4.0 billion in revenue over the past twelve months. Its operating profit was $533 million and net income was $505 million during this timeframe.
For event-driven traders, historical trends may provide an advantage, whether by positioning prior to earnings or responding to post-release movements. Therefore, if you are looking for upside with less volatility than from individual stocks, the Trefis High Quality portfolio offers an alternative, having surpassed the S&P 500 and yielded returns over 91% since its inception. See earnings reaction history of all stocks.
Akamai’s Historical Odds Of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There are 18 earnings data points tracked over the last five years, with 8 positive and 10 negative one-day (1D) returns recorded. In summary, positive 1D returns occurred approximately 44% of the time.
- Interestingly, this percentage rises to 55% if we analyze data for the last 3 years instead of 5.
- Median of the 8 positive returns = 5.8%, and median of the 10 negative returns = -10%
Additional information regarding the observed 5-Day (5D) and 21-Day (21D) returns post earnings is summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky approach (although not effective if the correlation is low) is to comprehend the correlation between short-term and medium-term returns post earnings, find a pair with the highest correlation, and execute the appropriate trade. For example, if 1D and 5D exhibit the highest correlation, a trader can position themselves “long” for the upcoming 5 days if the 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Please note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and the following 5D returns.
Is There Any Correlation With Peer Earnings?
Sometimes, the performance of peers can influence the stock reaction post-earnings. In fact, the pricing-in might start prior to the earnings announcement. Here is some historical data on the post-earnings performance of Akamai Technologies stock compared with the stock performance of peers that reported earnings just before Akamai Technologies. For accurate comparison, peer stock returns also represent post-earnings one-day (1D) returns.
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