Fastly (FSLY) AI Stock Analysis

• Market Cap: $1.28B
• Dividend Yield: N/A
• Average Volume (3M): 3.27M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.23
• Revenue Growth: 7.43%
• EPS Growth: 16.14%
• Country: US
• Employees: 1,100
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.03
• Shares Outstanding: 147,400,000
• 10 Day Avg. Volume: 5,143,284
• 30 Day Avg. Volume: 3,272,558
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 1.96
• Enterprise Value/Gross Profit: 3.69
• Enterprise Value/Ebitda: -20.43
• 1Y Price Target: $8.20
• Price Target Upside: -5.42% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 61 Neutral
• Price Target: $9.00 ▲(3.81% Upside)

Fastly's overall stock score is driven by strong technical momentum and positive earnings call sentiment, indicating operational improvements and revenue growth. However, significant challenges remain in profitability and valuation, with ongoing net losses and a negative P/E ratio. The company's growth potential is promising, but financial sustainability needs to be addressed.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for Fastly's services, enhancing its market position and supporting long-term business expansion.

Security Revenue Expansion

Growth in security revenue reflects successful product adoption and diversification, strengthening Fastly's competitive edge in the cloud security market.

Gross Margin Improvement

Improved gross margins indicate enhanced operational efficiency and cost management, contributing to better financial health and profitability potential.

Negative Factors

Profitability Challenges

Ongoing net losses highlight challenges in achieving profitability, which could impact long-term financial sustainability and investor confidence.

Leadership Transition

CFO departure may lead to strategic uncertainties and potential disruptions in financial management, affecting long-term operational stability.

Revenue Uncertainty

Exclusion of TikTok revenue introduces uncertainty in future earnings, potentially affecting growth forecasts and strategic planning.

Fastly Business Overview & Revenue Model

Company Description

Fastly, Inc. operates an edge cloud platform for processing, serving, and securing its customer's applications in the United States, the Asia Pacific, Europe, and internationally. The edge cloud is a category of Infrastructure as a Service that enables developers to build, secure, and deliver digital experiences at the edge of the internet. It is a programmable platform designed for web and application delivery. The company offers Compute@Edge; developer hub that includes solution library patterns and recipes, API and language references, change logs, and Fastly Fiddle solutions; device detection and geolocation, edge dictionaries, edge access control lists, and edge authentication services; full site delivery services, such as dynamic site acceleration, origin shield, instant purge, surrogate keys, real-time logging and stats, cloud optimizer, programmatic control, edge databases, content compression, reliability, and modern protocols and performance services; and streaming solutions and services, including live streaming, media shield, and origin connect. It also provides edge security solutions, such as DDoS protection and cloud, edge web application firewall (WAF), transport layer security (TLS), platform TLS, and compliance services; unified web application and API protection solutions that includes runtime self-application protection, advanced rate limiting, API and ATO protection, account takeover protection, bot protection, and next generation WAF. In addition, the company offers edge applications, such as load balancers and image optimizers; video on demand; and managed edge delivery services. It serves customers operating in digital publishing, media and entertainment, technology, online retail, travel and hospitality, and financial services industries. The company was formerly known as SkyCache, Inc. and changed its name to Fastly, Inc. in May 2012. Fastly, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

How the Company Makes Money

Fastly generates revenue primarily through its subscription-based model, offering tiered pricing plans for its CDN and edge computing services. Revenue streams include usage-based fees, where clients pay for the amount of data transferred and processed through Fastly's network, as well as monthly subscription fees for access to its suite of tools and services. The company also benefits from significant partnerships with tech giants and a range of enterprises across various industries, which contribute to its customer base and recurring revenue. Additionally, Fastly invests in expanding its service offerings and capabilities, which helps attract new clients and drive revenue growth.

Fastly Financial Statement Overview

Summary

Fastly demonstrates strong revenue growth and a stable gross profit margin, but profitability remains a significant issue with ongoing net losses. The balance sheet shows a manageable debt level, but negative return on equity highlights profitability challenges. Cash flow improvements are noted, but free cash flow remains a concern. Overall, Fastly is in a growth phase but needs to address profitability and cash flow sustainability.

Income Statement

Fastly's revenue has shown consistent growth over the years, with a TTM revenue growth rate of 2.95%. However, the company continues to operate at a loss, with a TTM net profit margin of -25.85% and negative EBIT and EBITDA margins. The gross profit margin remains relatively stable at 53.89%, indicating efficient cost management at the gross level, but overall profitability remains a challenge.

Balance Sheet

The debt-to-equity ratio has improved to 0.44 in the TTM period, indicating a relatively balanced capital structure. However, the return on equity is negative at -15.40%, reflecting ongoing losses. The equity ratio is not explicitly calculated, but the company's equity position appears stable relative to its assets.

Cash Flow

Fastly's cash flow situation is mixed. The operating cash flow has improved to $53.31 million in the TTM period, but free cash flow growth is negative. The free cash flow to net income ratio is positive at 0.53, indicating some ability to generate cash relative to net losses, but overall cash flow management remains a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	570.97M	543.68M	505.99M	432.73M	354.33M	290.87M
Gross Profit	302.92M	295.94M	266.33M	209.78M	187.33M	170.87M
EBITDA	-54.73M	-79.07M	-19.01M	-81.85M	-167.35M	-77.29M
Net Income	-147.59M	-158.06M	-133.09M	-190.77M	-222.70M	-95.93M
Balance Sheet
Total Assets	1.46B	1.45B	1.53B	1.90B	2.15B	1.16B
Cash, Cash Equivalents and Short-Term Investments	321.21M	295.88M	322.72M	517.97M	527.86M	194.18M
Total Debt	410.26M	404.66M	433.32M	833.54M	1.05B	90.53M
Total Liabilities	520.53M	486.11M	545.70M	940.96M	1.14B	158.09M
Stockholders Equity	942.65M	965.25M	979.49M	955.16M	1.01B	1.00B
Cash Flow
Free Cash Flow	28.28M	-20.81M	-31.91M	-149.95M	-88.87M	-59.09M
Operating Cash Flow	53.31M	16.41M	362.00K	-69.63M	-38.48M	-19.92M
Investing Cash Flow	-111.61M	178.90M	294.94M	235.75M	-794.51M	-276.68M
Financing Cash Flow	-6.62M	-17.10M	-331.38M	-189.15M	936.55M	274.40M

Fastly Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSLY, the sentiment is Positive. The current price of 8.67 is above the 20-day moving average (MA) of 8.12, above the 50-day MA of 7.50, and above the 200-day MA of 7.68, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 60.68 is Neutral, neither overbought nor oversold. The STOCH value of 44.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FSLY.

Fastly Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YALA	77 Outperform	$1.19B	9.43	19.26%	―	6.79%	12.97%
VMEO	72 Outperform	$1.29B	101.98	―	―	-1.35%	-59.67%
VTEX	70 Neutral	$786.08M	79.99	5.34%	―	4.51%	8241.83%
FSLY	61 Neutral	$1.28B	―	-15.34%	―	7.43%	16.14%
DSP	59 Neutral	$534.46M	252.68	8.57%	―	30.92%	―
BLND	58 Neutral	$975.06M	-23.95	88.02%	―	-4.76%	67.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%