Ahead of the Bell: Limelight Upgrade

Jefferies & Co. analyst Katherine Egbert moved her rating to "Hold" from "Underperform" and cut her price target to $4.25 from $5.

After last week's verdict, Akamai said it would seek a permanent injunction against Limelight, which intends to appeal, Egbert said.

"It's impossible to know what will happen to Limelight from here: on the downside, a permanent injunction means the business is nearly worthless, on the upside is the possibility of sale to Akamai or a large telecomm service provider," Egbert said in a note to clients.

Despite losing during the trial, Limelight has an attractive customer base, including DreamWorks and Amazon, she said.

Akamai or one of its peers is the most likely candidate to buy Limelight and could pay a premium of up to $7, she said.

Egbert warned that the longer Limelight's ability to compete remains in limbo, the more likely customer defections become.

"A lack of visibility and long-term commitments can only put pressure on Limelight to sell quickly to maximize the value of the installed base," she said.

Shares rose 17 cents, or 4.2 percent, to $4.25 in premarket trading.