Critical Analysis: Akamai Technologies (NASDAQ:AKAM) & Lyft (NASDAQ:LYFT)

Lyft (NASDAQ:LYFT) and Akamai Technologies (NASDAQ:AKAM) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Institutional and Insider Ownership

83.1% of Lyft shares are owned by institutional investors. Comparatively, 94.3% of Akamai Technologies shares are owned by institutional investors. 3.1% of Lyft shares are owned by company insiders. Comparatively, 2.0% of Akamai Technologies 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.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lyft	$5.46 billion	1.03	-$340.32 million	($0.16)	-84.81
Akamai Technologies	$3.97 billion	3.63	$547.63 million	$3.38	28.37

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lyft	-1.19%	-1.58%	-0.18%
Akamai Technologies	13.27%	14.63%	6.85%

Risk and Volatility

Lyft has a beta of 2.09, indicating that its stock price is 109% more volatile than the S&P 500. Comparatively, Akamai Technologies has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Lyft and Akamai Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lyft	0	28	9	1	2.29
Akamai Technologies	1	5	14	2	2.77

Lyft presently has a consensus target price of $17.77, indicating a potential upside of 30.98%. Akamai Technologies has a consensus target price of $116.85, indicating a potential upside of 21.86%. Given Lyft’s higher probable upside, equities research analysts clearly believe Lyft is more favorable than Akamai Technologies.

Summary

Akamai Technologies beats Lyft on 11 of the 15 factors compared between the two stocks.

About Lyft

Lyft, Inc. operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. It operates multimodal transportation networks that offer access to various transportation options through the Lyft platform and mobile-based applications. The company's platform provides a ridesharing marketplace, which connects drivers with riders; Express Drive, a car rental program for drivers; and a network of shared bikes and scooters in various cities to address the needs of riders for short trips. It also offers centralized tools and enterprise transportation solutions, such as concierge transportation solutions for organizations; Lyft Pink subscription plans; Lyft Pass commuter programs; first-mile and last-mile services; and university safe rides programs. The company was formerly known as Zimride, Inc. and changed its name to Lyft, Inc. in April 2013. Lyft, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

About Akamai Technologies

Akamai Technologies, Inc. provides cloud computing, security, and content delivery services in the United States and internationally. The company offers cloud solutions to keep infrastructure, websites, applications, application programming interfaces, and users safe from various cyberattacks and online threats while enhancing performance. It also provides web and mobile performance solutions to enable dynamic websites and applications; media delivery solutions, including video streaming and video player services, game and software delivery, broadcast operations, authoritative domain name system, resolution, and data and analytics; and cloud computing services, such as compute, storage, networking, database, and container management services to build, deploy, and secure applications and workloads. In addition, the company offers content delivery solutions; and an array of service and support to assist customers with integrating, configuring, optimizing, and managing its offerings. It sells its solutions through various channel partners. Akamai Technologies, Inc. was incorporated in 1998 and is headquartered in Cambridge, Massachusetts.