Shares of Limelight Networks (EGIO 1.41%) are rising today, up 7.5% as of 1:17 p.m. EDT, after investors were quick to embrace a bullish report from analyst firm Truist.
The content delivery network (CDN) specialist got a buy rating and a $9 share price target from Truist analyst Greg Miller. The CDN market is accelerating its growth in 2020 due to coronavirus-boosted interest in media-streaming services, and Limelight is gaining market share at this crucial moment in time. Miller also noted that Limelight should be able to meet its long-term financial targets of 15% annual revenue growth and 25% EBITDA margins thanks to the beneficial effects of COVID-19 lockdown policies.
Limelight's stock has nearly doubled over the last 52 weeks, posting an 91% one-year return and a 54% gain in 2020.The company is climbing closer to sustainable bottom-line profits with every quarterly report and the CDN service offers some features that larger sector rival Akamai Technologies can't match yet, such as edge computing functions and a tight focus on the promising digital media market. In that light, Miller's analysis looks correct and today's market reaction makes sense.