Markets

Why Limelight Networks Stock Is Soaring Today

What happened

Shares of Limelight Networks (NASDAQ: LLNW) 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.

So what

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.

A smiling young man and woman cuddle up on the TV couch.

Image source: Getty Images.

Now what

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.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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