In a report released yesterday, Madeline Brooks from Bank of America Securities maintained Fastly (FSLY – Research Report) to a Buy, with a price target of $26.50.
Madeline Brooks has given Fastly a Buy rating based on a comprehensive review of the company’s various aspects. Brooks acknowledges that Fastly’s stock experienced a decline of 12% in the latest trading session due to sequential declines in delivery pricing and lower traffic volumes in September compared to August. However, she emphasizes that delivery is just one component of the Fastly narrative, with many subtleties around delivery contracts that may not be fully reflected in basic traffic and pricing models. Brooks is optimistic about drivers like security, managed services, and edge compute supporting 3Q results that are in-line to slightly above guidance. She projects a 3Q revenue of $128 million, a 19% YoY increase, which is slightly above the consensus.
Furthermore, Brooks points out potential delivery nuances that could influence Fastly’s delivery revenues in the second half of 2023. The company’s diversification into tech and financial services should help moderate the seasonal volatility traditionally experienced by Fastly, thereby promoting more stable revenues and margins. Additionally, Brooks sees multiple pathways to upside potential in Fastly’s FY numbers despite concerns about traffic growth and delivery pricing. This includes the company’s introduction of simplified pricing and packaging tiers, diversification into industries that require personalization and customization, and strong demand for managed security services. This comprehensive analysis led her to maintain her Buy rating and $26.50 price objective for Fastly.
In another report released yesterday, Raymond James also maintained a Buy rating on the stock with a $25.00 price target.
FSLY’s price has also changed slightly for the past six months – from $15.640 to $15.760, which is a 0.77% increase.
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Fastly (FSLY) Company Description:
Fastly, Inc. provides real-time content delivery network services. It offers edge cloud platform, edge software development kit (SDK), content delivery and image optimization, video and streaming, cloud security, load balancing, and managed CDN. The company was founded by Artur Bergman, Simon Wistow, and Gil Penchina in March 2011 and is headquartered in San Francisco, CA.
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