Limelight Networks (NasdaqGS:LLNW) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Limelight Networks, Inc. (NasdaqGS:LLNW) is scheduled to report Q3 earnings results on October 22, 2020.

The company is expected to report earnings of $0.02/share on revenue of $58.941 million. The consensus earnings per share (EPS) of $0.02/share is based on a poll of 10 analysts and represents a growth in eps of 100.0% over the same quarter last year, when the company reported earnings of $0.01/share.

The revenue forecast of $58.941 million based on a poll of 10 analysts implies a year-over-year (YoY) growth in revenue of 14.8%. Last year the company reported $51.321 million in revenue for the quarter.

Expected to report EPS growth of 100.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $58.94 $51.32 14.8%
EPS $0.02 $0.01 100.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 1 quarters.

What are your expectations from Limelight Networks, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.01 $0.03 349.8% Beat
Q1, 2020 -$0.0037 $0 0% Beat
Q4, 2019 $0.046 $0.05 8.7% Beat
Q3, 2019 $0.0067 $0.01 49.9% Beat
Q2, 2019 -$0.02 -$0.03 -36.4% Missed
Q1, 2019 -$0.0017 -$0.04 -2,295.2% Missed
Q4, 2018 -$0.0067 $0 0% Beat
Q3, 2018 $0.03 $0.03 0% Met

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −1.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 20, 2020 $7.13 $6.99 −1.9% Decline
April 23, 2020 $6 $5.52 −8.0% Decline
January 29, 2020 $5.45 $5.38 −1.2% Decline
October 16, 2019 $3.18 $3.75 17.9% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.71, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.71 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Limelight Networks, Inc. is currently trading at $6.12/share, up 2.3% for the day. The company is trading at approximately 74.7% of its 52-week high of $8.19/share. The company’s stock price is down −12.4% since the last earnings report and down −8.4% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 56.54 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:LLNW Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −102.68 and a forward P/E multiple of 76.42.

Limelight Networks, Inc.’s current share price also implies a price-to-book (P/B) multiple of 4.40. The following table summarizes some other key fundamental ratios:

Data as of October 20, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $6.12
P/E Ratio −102.7x
P/E Ratio (Fwd) 76.4x
PEG Ratio −1.5
Total Debt / Total Capital 2.0%
Levered Free Cash Flow -$14.667 million
EV / EBITDA 47.7x

Finbox

Limelight Networks, Inc. is a small-cap stock with a market capitalization of $747.1 million and a total enterprise value of $743.6 million. The company operates in the Information Technology sector and the IT Services industry.

Limelight Networks, Inc. provides content delivery and related services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates private networks that deliver Websites, mobile applications, videos, music, software, games, and APIs; offers live and on-demand video delivery services; and provides online video platforms that help organizations manage, publish, syndicate, analyze, and monetize video contents. It also offers edge cloud services; cloud security services that provide defense against malicious apps, Website attacks, and unauthorized content access; and cloud storage services. In addition, the company provides 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, gaming, software, and social media industries, as well as technology companies and other entities conducting businesses online. Limelight Networks, Inc. was founded in 2001 and is headquartered in Scottsdale, Arizona.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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