Columbia Care Inc.

CCHWF Details

Columbia Care Inc. (OTC: CCHWF) is a medical cannabis producer, manufacturer, and supplier with licenses in over 18 jurisdictions in the US and the European Union (EU). CCHWF operates 130 locations, including 99 dispensaries and 31 cultivation and production facilities. Seed & Strain, Triple Seven, gLeaf, Plant Sugar, Platinum Label CBD are some of its prominent brands. In addition, Cannabist, the company's new retail brand, debuted in FY21, establishing a national dispensary network based on proprietary technological systems.

Receipt of Approval to Operate in Boston: CCHWF announced on September 30, 2021, that the Cannabis Control Commission (CCC) and the Boston Cannabis Board (BCB) gave their clearance for Cannabist to open in downtown Boston. Cannabist Boston, one of three dispensaries run by the company in Massachusetts, is also its eighth Cannabist dispensary worldwide. The company also stated that it is transitioning its retail storefronts to the Cannabist brand in all regions.

Starting Cannabis Cultivation in New York: On September 29, 2021, the company stated that the New York State Department of Health approved the commencement of cultivation and processing activities at its new facility on eastern Long Island, New York. The first harvest will take place in Q4FY21.

H1FY21 Results: The company reported a massive increase of 2.44x YoY in revenues to USD 188.48 million during H1FY21 (ended June 30, 2021) compared to USD 54.74 million during H1FY20, resulting from recent business acquisitions (Corsa Verde LLC, Gleaf Medical LLC, CannAscend Alternative LLC and CannAscend Alternative Logan LLC), dispensary network expansions, plus an increase in sales from existing dispensaries. Its H1FY21 net loss (attributable to shareholders) reduced to USD 25.57 million from USD 44.24 million in H1FY20. The company exited H1FY21 with a cash balance of USD 148.75 million and a total debt of USD 495.18 million.

Key Risks: The legality of the cannabis sector determines the success of CCHWF's business plan. The political climate around the cannabis business, in general, is tumultuous, and the regulatory framework is constantly changing. As a result, the company's business may be substantially harmed in the long run if the federal government begins to enforce federal cannabis laws in states where the sale and use of cannabis are now legal or if existing applicable state laws are repealed or limited.

Outlook:

FY21 Guidance (Source: Investor Presentation, August 2021)

Valuation Methodology: Price/Sales Per Share Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

CCHWF Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: CCHWF's stock price fell 39.56% in the past nine months and is currently close to the lower band of the 52-week range of USD 3.19 to USD 7.89. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 43.35. We have valued the stock using the Price/Sales-based relative valuation method and arrived at a target price of USD 4.77. Considering the company's growth prospects, regulatory approvals, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 3.82, up 2.14% as of October 05, 2021, 2:57 PM ET.

*All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Limelight Networks, Inc.

LLNW Details

Limelight Networks, Inc. (NASDAQ: LLNW) is a content delivery network (CDN) service provider that delivers digital content over the internet. The company provides live streaming sporting events, international movie premieres, video games, and file downloads for new phone apps to its clients, including Amazon and Sony. Its other income-generating services include digital content distribution, video delivery, cloud security, edge computing, origin storage services, professional services and other infrastructure services. The company operates in the Americas, Europe, the Middle East, Africa (EMEA), and the Asia Pacific regions.

Acquiring Layer0: LLNW announced on September 16, 2021, that it had finalized the acquisition of Moov Corporation, d/b/a Layer0.  Layer0's tools provide sub-second web apps and APIs through an all-in-one Jamstack platform, supporting LLNW's vision as an edge enabled SaaS solutions provider.

H1FY21 Results: Lower traffic volumes as a result of easing of COVID-19 lockdown restrictions, reduction in new content release for consumption, and decline in average selling price contributed to a 13.86% drop in revenues to USD 99.54 million in H1FY21 (ended June 30, 2021) compared to USD 115.56 million in H1FY20. As a result, LLNW's net losses increased dramatically from USD 6.98 million in H1FY20 to USD 39.23 million in H1FY21. The cash and cash equivalents (including marketable securities) totaled USD 119.54 million as of June 30, 2021, with total debt amounting to USD 121.37 million.

Key Risks: In H1FY21 and H1FY20, LLNW's top 20 clients accounted for about 77% of its total revenues. Excessive reliance on specific customers for revenue could harm the company's financial health. Furthermore, based on customer geography, three countries, the US, Japan, and the UK, represented more than 10% of the firm's total revenue in H1FY21. As a result, any significant change in regulatory requirements or economic conditions in these areas might significantly impact the company's operations and cash flows.

Outlook: LLNW's capital expenditure forecast for FY21 has been reduced from USD 20 – 25 million to USD 15 – 20 million as of July 2021.

FY21 Guidance (Source: Q2FY21 Earnings Release, July 29, 2021)

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

LLNW Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: LLNW stock has fallen 56.91% in the past twelve months and is currently close to the lower band of the 52-week range of USD 2.31 to USD 7.04. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 39.77. We have valued the stock using the EV/Sales-based relative valuation method and arrived at a target price of USD 2.90. Considering the company's growth prospects, inorganic expansion endeavors, positive outlook, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 2.37, up 1.72% as of October 05, 2021, 2:54 PM ET.

*All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

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