Did Limelight Networks, Inc. (NASDAQ:LLNW) Deserve the Bloodshed Off Earnings?

Limelight Networks, Inc. (NASDAQ:LLNW) recently announced its Q3 earnings, with the straight data as follows: EPS in-line, revs in-line; guides FY18 EPS in-line, reaffirms FY18 revs guidance; earnings of $0.03 per share, excluding non-recurring items, in-line with the S&P Capital IQ Consensus of $0.03; revenues rose 7.0% year/year to $49.32 mln vs the $49.01 mln S&P Capital IQ Consensus. The company issued guidance for FY18, seeing EPS of $0.14-0.17, excluding non-recurring items, vs. $0.15 S&P Capital IQ Consensus; and FY18 revs of $200-203 mln vs. $202.78 mln S&P Capital IQ Consensus.

That’s as the crow flies. Now, let’s dig a little deeper and try to understand whether or not the stock’s big plunge reaction makes sense. I have to say, at first blush, it does not. It may well be more of an artifact of a weak tape in the broad market. At such times, speculative plays never get the benefit of the doubt. But also at such times, tremendous opportunities are planted in the soil of the market. It may well be we have such an opportunity gradually coming into place right now in Limelight.

Limelight Networks, Inc. (NASDAQ:LLNW) trumpets itself as a company that provides content delivery and related services and solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.

The company offers services and solutions for businesses to deliver their digital content across Internet, mobile, and social channels. It provides Orchestrate Platform, a suite of integrated services comprising content delivery, video content management, Website and Web application acceleration, Website and content security, and cloud storage services.

The company also offers professional services and other infrastructure services, such as transit and rack space services. It serves media companies operating in the television, music, radio, newspaper, magazine, movie, game, software, and social media industries, as well as enterprises, technology companies, and government entities conducting business online.


Push and Pull

As noted above, LLNW just announced Q3 financials, with revenue of $49.3 million for the third quarter of 2018, up 7% compared to $46.1 million in the third quarter of 2017. In short, it was far from a disastrous quarter. The company appears to be moving forward, developing key strategic relationships, and executing well.

The company met analyst earnings estimates of $0.03 per share and came in just above revenue projections as sales rose 6% to total $49.3 million.

“We are pleased with Limelight’s third quarter results that showed year over year improvements even in a seasonally weak quarter, and marked record achievements across multiple key financial and non-financial metrics. Customers continue to reward Limelight’s performance gains by sending us more business, and we believe we are continuing to take market share. Pricing discipline and operational efficiencies are driving gains in gross margin and overall profitability, and at the same time, the continuing improvement in an already strong Net Promoter Score confirms our customer’s growing satisfaction with the value they obtain from Limelight,” said Bob Lento, Chief Executive Officer at Limelight.

The losses suffered are likely the result of a shift in the current shade of goggles through which investors are viewing stocks at present. When volatility erupts, speculative names are afforded no slack. But, if that is the source of a dip, it is also possibly the source of a strong opportunity for the same reason.

Limelight Networks, Inc. (NASDAQ:LLNW) managed to rope in revenues totaling $50.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top-line growth of 10.8%, as compared to year-ago data in comparable terms.

In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($45.6M against $37.6M).

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