What happened

Shares of Limelight Networks (EGIO -5.63%) fell 14.8% in July 2020, according to data from S&P Global Market Intelligence. The content delivery network (CDN) operator delivered a mixed second-quarter report. A few investors brushed off the company's solid sales to focus on soft earnings instead, cashing in some of their Limelight profits.

A curious businessman watches a red charting arrow crash down through the floor at his feet.

Time to buy? Image source: Getty Images.

So what

On July 20, Limelight reported a $0.01 loss per share, an improvement from a $0.03 loss per share in the year-ago quarter. Sales rose 28% to $58.6 million. The Street's consensus estimates had pointed to earnings near $0.01 per share on approximately $56.7 million in top-line revenue.

The stock fell 8% that day and continued to slide, adding up to a 20% drop in a three-day period.

Now what

This report was not published in a vacuum. Limelight entered July on a full head of steam, and investors are still enjoying strong returns, such as 49.5% year to date and 142% over the last 52 weeks. The company was thriving in the fall of 2019 as several new video-streaming platforms either hit the stage or planned their introductions in early 2020, and Limelight's CDN services played a large part in many of these launches. The lockdowns and work-from-home policies of the COVID-19 era only accelerated Limelight's business prospects.

I can't blame nervous investors for pocketing some profits in the face of a mixed earnings report, but Limelight looks like a winning investment idea at these slightly discounted prices.