Skip to main content

Market Overview

Cowen Downgrades Limelight Networks On Revenue Growth, Gross Margin Headwinds

Share:
Cowen Downgrades Limelight Networks On Revenue Growth, Gross Margin Headwinds

Limelight Networks, Inc’s (NASDAQ: LLNW) high customer concentration is causing severe pricing pressure that may create a significant impact on revenue growth, while underutilized capacity in South Korea could result in gross margin contraction in 2021, according to Cowen.

The Limelight Networks Analyst: Colby Synesael downgraded Limelight Networks from Outperform to Market Perform, while reducing the price target from $9.00 to $4.75.

The Limelight Networks Thesis: Industry traffic may grow substantially, but the impact of higher volumes from the company’s large media customers are being offset by price declines of more than 25%, Synesael said in the note.

This may drive “more muted top-line growth” from the fourth quarter of 2020 through 2021, he added.

“We believe this pricing pressure, coupled with Limelight’s revenue concentration among large customers as evidenced by its avg. revenue per customer of ~$110K in 3Q20, will drive an outsized impact on Limelight’s revenue growth vs. peers which we believe is not currently reflected in Street estimates,” the analyst wrote.

“We view upside as limited until LLNW-specific trends improve,” he stated.

LLNW Price Action: Shares of Limelight Networks had declined by 8% to $4.28 at the time of publication Tuesday.

(Photo: Dlhohler via Wikimedia Commons)

Latest Ratings for LLNW

DateFirmActionFromTo
Feb 2021DA DavidsonDowngradesNeutralUnderperform
Feb 2021Truist SecuritiesDowngradesBuyHold
Feb 2021Raymond JamesDowngradesOutperformMarket Perform

View More Analyst Ratings for LLNW
View the Latest Analyst Ratings

 

Related Articles (LLNW)

View Comments and Join the Discussion!

Posted-In: Colby Synesael CowenAnalyst Color Penny Stocks Downgrades Price Target Small Cap Analyst Ratings

Latest Ratings

StockFirmActionPT
GIKColliers SecuritiesInitiates Coverage On14.0
SANWLake StreetInitiates Coverage On6.0
LILAMorgan StanleyDowngrades15.0
BEJP MorganUpgrades36.0
NEXACredit SuisseUpgrades11.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com