Limelight Networks - A long term play with potential short term gains

When I opened my RH account I was given one free share. That share was LimeLight Networks. I realized I didn’t know much about this company, so I dived in. What I found was interesting - I believe this company is currently undervalued as well as a prime acquisition target.

While I dont think this company will rocket into the stratosphere, I do believe its current stock price does not reflect the company and it has room to trickle upwards.

Please review this DD and attack it and/or build on it.

Overview:

Limelight Networks is an American company that provides a content delivery network service, used for delivery of digital media content and software. With AWS being their biggest customer (both a pro and a con) - this company is poised to grow when considering all their tailwinds which I will outline below.

Topline information:

  • Limelight is a CDN that competes with FASTLY and CLOUDFLARE. Limelight has always lagged behind its competitors and been a sleepy stock, however there is potential movement on the horizon.
  • The company recently (start of the year) appointed a new CEO, Bob Lyons.
  • The company is aggressively moving into edge computing (the next iteration of cloud computing) with the acquisition of Layer0 (an edge computing company).
  • Trading at only 2.17x revenue with a mkt cap of 500MM
    • Strong YoY revenue growth - up 14.73%

Financial Information

  • Quarter over Quarter revenue beat analyst expectations and came it at +14% ($55MM)
  • Closed 30 new customer opportunities - 2 of which have an Annual Contract Value of over $1MM / 10 of which are +$100k
  • $75.8 million cash on hand
  • Guidance was bullish however full 2022 year guidance will be released with 4q earnings.

Other information

  • Is in the Roundhill Investments Metaverse ETF
    • This is in here moreso because im a big fan of Matthew Ball and his etf.
  • Recently upgraded to a buy by Raymond James with a PT of $5
  • The recent price upgrade has put shorts in a not great position - but with a small % of FF shorted this isnt really super pertinent information.

The Net/Net
The past year is indicative of charting a growth trajectory that has been previously eluding LLNW. With aggressive moves (acquisition) and management shifts (new CEO) the past year of activity is what you would look for in a company undergoing change. Couple this with analysts raising expectations, Im bullish on the long term growth prospects with LLNW.

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This is a great find at this price level, bud. Chart looks bullish af…


I was curios what may have driven this almighty push since Dec. 1, and it was their presence in the Raymond James TechCon.
Must have drummed up great interest and more future partnerships.
It’s trying to knock down this resistance of 3.85.
Once that’s broken, there is nothing preventing it from testing 4.99 again.

With Amazon as one of their clients, it should be an easy selling point to other startups and a leg up against their competitors.


Other big names are in this too.
I’ll keep watch for now, but will probably load up right away, 1stQ 2022.

I love their network map.
I’m big on cyber security and media stuff, as those are in line with what I do.

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Thanks for looking into it! Agree with you that the price does not currently reflect the true value of the company.

Its clear the CEO is steering it in the right direction since his start at the beginning of the year. With the cash on hand the company currently has after its acquisition they’re poised to make continued aggressive moves and capture more market share in the space.

Looking forward to watching this one grow. Feb earnings will be interesting.

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I like this a lot. I think this has a lot of potential. AWS and new partnerships gives them a lot of growth potential and it seems like the market agrees given the recent movement. I’ll pick up some shares and hang out.

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My understanding is that this is just undervalued and does not have a catalyst right? I’m thinking of picking this up for my main account and hold.

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Yes that is the thesis here. This is not a squeeze play or banking on a catalyst. I just think, and have data to support, the fact that this company is significantly undervalued.

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Thank you. Picked some shares. It really looks good

On the weekly candles now…


Last time it broke out of the cup to a new ATH, it took 26 weeks.
All indicators are confirming the same bullish movement this time around.

I’d watch out for more events and announcements from them.
This will help time entries better, before more upward momentum.
Treat this like any other tech related stock–no news, weak stock sentiment, more news, more bullish drive.

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https://finance.yahoo.com/news/limelight-networks-report-fourth-quarter-150000475.html

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Excited for the upcoming ER. Also a little anxious :stuck_out_tongue:

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Are you taking profit / trimming your position going into ER?

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https://finance.yahoo.com/news/limelight-networks-reports-record-fourth-210200089.html

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Took Profit, thank you @meltedcrayon and @rexxxar

Great job taking gains!

I’ve updated the resistance lines, as I think it will keep working it’s way until all of them get beaten.
The only question is time, but I don’t think it will take 2years…

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Thanks for the continued help here Rex! If anyone bought in around the time I mentioned it the gains at this point are healthy, the steady uptrend has been nice. Im still bullish on this company, but again, this isnt a get-rich-quick play - its a long term hold :slight_smile:

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I have been following this play and plan to start making a small entry. Thanks for putting this together, guys.

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I pound samting…


Look at dat gup. Gups alweys pills.

We hit the $5.00 mark! Long term investors rejoice!!!