Fastly (FSLY, Financial) shares fell sharply today, experiencing a decline of 22.24% in market value. This decline comes amid broader market gains, highlighting investors' apprehension about Fastly's recent financial disclosures and projected earnings trajectory.
In its latest earnings report, Fastly (FSLY, Financial) posted a non-GAAP loss per share of $0.03 with revenue of $140.57 million, slightly surpassing the expected sales of $138.63 million. However, the company failed to meet the breakeven earnings forecast, which has contributed to the negative market reaction.
Fastly's revenue showed a modest 2% year-over-year increase in the fourth quarter, achieving a record high for that period. Despite this, the company's forward guidance has caused concern. For the upcoming quarter, Fastly projects a per-share loss between $0.09 and $0.05 with expected sales between $136 million and $140 million. This falls short of analyst predictions of a $0.01 per-share loss on sales of $137.14 million.
Looking forward, Fastly forecasts annual sales between $575 million and $585 million and an adjusted loss per share between $0.15 and $0.09. This mirrors the previous year's $0.12 loss per share, indicating ongoing financial challenges that have eroded investor confidence.
Valuation metrics from the provided data indicate that Fastly's GF Value reflects a possible value trap, urging cautious consideration by investors. The stock is currently priced at $7.83, with a GF Value estimate of $15.21. For more details, visit the GF Value page.
Fastly (FSLY, Financial) exhibits several warning signs. The Altman Z-score indicates financial distress, suggesting a potential bankruptcy risk within the next two years. The company shows poor earnings quality as suggested by the Sloan Ratio, with gross and operating margins in decline over the last five years. Furthermore, recent insider activity reveals significant stock selling over the past three months, with 381,859 shares offloaded in 17 transactions.
Despite these concerns, Fastly (FSLY, Financial) is unlikely to be involved in earnings manipulation based on its Beneish M-Score, which suggests that the company does not engage in financial reporting manipulation. However, the cumulative outlook remains cautious, with significant scrutiny on Fastly's approach to turning around its operational margins and addressing its financial health.
