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.
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