Limelight Networks, Inc. (NASDAQ: LLNW) just released a report and analysts have set a price target of US $ 3.61
It is shaping up to be a difficult time for Limelight Networks, Inc. (NASDAQ: LLNW), which released disappointing quarterly results a week ago that could have a noticeable impact on how the market views the stock. It was a pretty negative result overall, with revenues of US $ 48 million falling 7.3% below analysts’ expectations. Worse, the company recorded a statutory loss of US $ 0.11 per share, much larger than what analysts had expected before the result. This is an important time for investors, as they can follow a company’s performance in its report, look at experts’ forecasts for next year, and see if there has been a change in the company’s expectations. company. We put together the most recent statutory forecast to see if analysts have changed their earnings models as a result of these results.
Following the latest results, the eight analysts covering Limelight Networks are now forecasting revenue of US $ 218.5 million in 2021. If achieved, that would reflect a reasonable 2.0% improvement in sales over previous years. Last 12 months. Loss per share is expected to decline significantly in the near future, narrowing 21% to US $ 0.33. Still, prior to the latest results, analysts were forecasting revenues of US $ 220.7 million and losses of $ 0.29 per share in 2021. While this year’s earnings estimates remained stable, there were also a dramatic increase in per-share loss expectations, suggesting the consensus has a somewhat mixed opinion on the stock.
The consensus price target fell 11% to US $ 3.61 per share, with analysts clearly concerned about increasing losses. The consensus price target is only an average of individual analysts’ targets, so it might be helpful to see the breadth of the range of underlying estimates. Currently, the most bullish analyst values Limelight Networks at US $ 5.00 per share, while the most bearish the price at US $ 2.50. Notice the wide gap in analysts’ price targets? This implies for us that there is a fairly wide range of possible scenarios for the underlying activity.
Looking at the big picture now, one of the ways we can understand these forecasts is to see how they stack up against both past performance and industry growth estimates. We highlight that Limelight Networks revenue growth is expected to slow, with the expected annualized growth rate of 4.0% through the end of 2021 being well below the historic growth of 6.4% per year over the past five years. years. Compare that to other companies (with analyst forecasts) in the industry, which are expected to experience revenue growth of 15% per year overall. So it’s pretty clear that while revenue growth is expected to slow, the industry at large is also expected to grow faster than Limelight Networks.
The bottom line
The most important thing to remember is that analysts have increased their estimates of loss per share for the next year. On the positive side, there has been no major change in income estimates; although forecasts imply that revenues will outperform the industry as a whole. Additionally, analysts also lowered their price targets, suggesting the latest news has led to greater pessimism about the company’s intrinsic value.
With this in mind, we still believe that the long-term trajectory of the company is much more important for investors to consider. We have estimates – from several Limelight Networks analysts – going through 2023, and you can see them for free on our platform here.
It is also worth noting that we have found 2 warning signs for Limelight networks that you need to take into consideration.
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