Please ensure Javascript is enabled for purposes of website accessibility

Why Limelight Networks Stock Tanked Today

By Chris Neiger - Feb 12, 2021 at 3:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A worse-than-expected quarter resulted in multiple downgrades by analysts.

What happened

Shares of Limelight Networks (LLNW -3.53%) fell sharply today after the company released its fourth-quarter results yesterday. The company missed analysts' consensus revenue and earnings estimates, resulting in a flurry of downgrades for Limelight's stock. 

The tech stock was down by 18.6% as of 2:47 p.m. EST. 

So what 

Limelight reported revenue of $55.4 million for the fourth quarter, down 8% year over year, which fell far below the Street's consensus estimate of $61.3 million. Additionally, the company's non-GAAP loss per share of $0.03 was much worse than analysts' expectation of a profit of $0.02 per share.  

A red line graph on a black background.

Image source: Getty Images.

"Our immediate focus is the challenges we faced in the fourth quarter, specifically top-line growth and the resulting pressure on margins. Quite frankly, performance in these areas is not where it should be," Limelight's new CEO, Bob Lyons, said in a press release.

As a result of Limelight's disappointing fourth quarter, analysts at Raymond James, DA Davidson, and Truist all downgraded the company's stock. 

Now what 

Limelight's management didn't issue any guidance and instead said, "With new leadership and active efforts underway to evaluate all aspects of the business strategy and cost structure, the focus is on immediate and long-term steps to position the company as a leader delivering edge-based solutions." 

Lyons just started as Limelight's CEO at the beginning of February, so investors will have to wait and see how well he steers the company in the coming quarters.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Limelight Networks, Inc. Stock Quote
Limelight Networks, Inc.
$3.28 (-3.53%) $0.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.