LLNW - Limelight: Poised For 50% Upside But Gradually
- The CDN market is highly competitive with Limelight having cutting-edge video streaming services with low latency.
- Investors dumped the stocks after third quarter's earnings miss despite upbeat revenues.
- Also, this is a business where scalability does matter and Limelight has the cash to expand its web acceleration infrastructure.
- On the other hand, spending on growth means that gross margins will only improve gradually.
- The CDN play does have a distinct financial model allowing it to benefit from positive EBITDA margins and is, therefore, a buy.
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Limelight: Poised For 50% Upside, But Gradually