Analyzing Limelight Networks (NASDAQ:LLNW) & Steel Connect (NASDAQ:STCN)

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Limelight Networks (NASDAQ:LLNW) and Steel Connect (NASDAQ:STCN) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Limelight Networks and Steel Connect, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Limelight Networks 0 2 2 0 2.50
Steel Connect 0 0 0 0 N/A

Limelight Networks currently has a consensus price target of $4.57, indicating a potential upside of 81.22%. Given Limelight Networks’ higher probable upside, equities analysts clearly believe Limelight Networks is more favorable than Steel Connect.

Institutional & Insider Ownership

71.8% of Limelight Networks shares are held by institutional investors. Comparatively, 51.1% of Steel Connect shares are held by institutional investors. 10.4% of Limelight Networks shares are held by insiders. Comparatively, 12.5% of Steel Connect shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Limelight Networks and Steel Connect’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Limelight Networks -11.63% -13.07% -10.68%
Steel Connect -4.44% -23.39% -2.92%

Risk and Volatility

Limelight Networks has a beta of 2.03, suggesting that its stock price is 103% more volatile than the S&P 500. Comparatively, Steel Connect has a beta of 0.16, suggesting that its stock price is 84% less volatile than the S&P 500.

Earnings and Valuation

This table compares Limelight Networks and Steel Connect’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Limelight Networks $195.67 million 1.50 $9.84 million ($0.02) -126.00
Steel Connect $645.26 million 0.17 $36.71 million N/A N/A

Steel Connect has higher revenue and earnings than Limelight Networks.

Summary

Limelight Networks beats Steel Connect on 6 of the 11 factors compared between the two stocks.

About Limelight Networks

Limelight Networks, Inc. provides content delivery and related services and solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers services and solutions for businesses to deliver their digital content across Internet, mobile, social, and other digital initiatives. It operates edge services platform that provides content delivery services, video content management services, performance services for Website and Web application acceleration and security, professional services, cloud storage, and edge computing services, as well as sells equipment. The company also offers professional services and other infrastructure services, such as transit and rack space services. It serves media companies operating in the television, music, radio, newspaper, magazine, movie, gaming, software, and social media industries, as well as enterprises, technology companies, and government entities conducting business online. Limelight Networks, Inc. was founded in 2001 and is headquartered in Tempe, Arizona.

About Steel Connect

Steel Connect, Inc., through its subsidiaries, provides supply chain and logistics services to the consumer electronics, communications, computing, medical devices, software, storage, retail, and other industries. It operates through five segments: Americas, Asia, Europe, Direct Marketing, and e-Business. The company offers product configuration and packaging, kitting, and assembly of components and parts into finished goods; and value-added processes, such as product testing, radio frequency identification (RFID) tagging, product or service activation, language settings, personalization and engraving, multi-channel packaging, and packaging design services. It also provides fulfillment services, including order management, pick, pack and ship, retail compliance, and demand planning services; and content protection and activation, and IP security services, as well as optimizes component and finished goods inventory levels. In addition, it offers operates a cloud-based e-commerce platform, which online buying experience so that products can be purchased, serviced, and delivered worldwide; and provides reverse logistics services that simplifies the returns process for retailers and manufacturers to improve service parts management and the value of returned assets. Further, the company offers EZ Connect service, which provides essential fulfillment capabilities for emerging growth companies without the expensive surprises associated with third-party fulfillment services; and direct marketing services comprising end-to-end services for paper-based direct marketing and omnichannel marketing campaign services. The company was formerly known as ModusLink Global Solutions, Inc. and changed its name to Steel Connect, Inc. in February 2018. Steel Connect, Inc. was incorporated in 1986 and is headquartered in Waltham, Massachusetts.

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