Benzinga | Jul 6, 2021 08:40AM EDT

Goldman Sachs Downgrades Limelight Networks To Sell

* Goldman Sachs analyst Brett Feldman downgraded the rating on edge cloud services provider Limelight Networks Inc (NASDAQ:LLNW) from Neutral to Sell.

* Feldman lowered the price target from $3 to $2.5, implying a 21% downside potential.

* Feldman's "cautious outlook" reflects Limelight's high exposure to content delivery networks, representing 80% of revenue.

* The backdrop became increasingly challenging from continued pricing pressure and the traffic tailwinds to the business as the pandemic lost steam. Also, Limelight's ambitious targets for 2021 imply a steep ramp in the second half of the year's revenue.

* Limelight missed both the revenue analyst consensus for Q4 FY20 and Q1 FY21. It missed the EPS consensus for both quarters by 200% - 250%.

* Limelight will announce the Q2 results, followed by the earnings call on July 29.

* The stock lost 60.2% last year.

* Price action: LLNW shares traded lower by 4.84% at $2.95 in the premarket session on the last check Tuesday.