Fastly (FSLY, Financial) has caught the attention of KeyBanc, which has initiated its coverage with a Sector Weight rating. The firm is highlighting an investment opportunity for those willing to embrace higher risk, given Fastly's current financial strategy aimed at reducing debt. Despite the potential, KeyBanc notes that Fastly presents a highly variable outcome compared to its industry peers. This uncertainty creates a situation where the stock could either significantly succeed or fail, and the firm has not yet formed a strong stance on which direction Fastly might take.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Fastly Inc (FSLY, Financial) is $6.92 with a high estimate of $9.00 and a low estimate of $5.00. The average target implies an downside of 8.27% from the current price of $7.54. More detailed estimate data can be found on the Fastly Inc (FSLY) Forecast page.
Based on the consensus recommendation from 9 brokerage firms, Fastly Inc's (FSLY, Financial) average brokerage recommendation is currently 3.1, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Fastly Inc (FSLY, Financial) in one year is $13.21, suggesting a upside of 75.2% from the current price of $7.54. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Fastly Inc (FSLY) Summary page.
FSLY Key Business Developments
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fastly Inc (FSLY, Financial) exceeded the upper ends of both revenue and operating loss guidance ranges for Q1 2025.
- The company raised its 2025 revenue guidance by $10 million and operating loss guidance by $0.03 million at their respective midpoints.
- Fastly Inc (FSLY) generated $8 million in positive free cash flow, moving closer to break-even for the year.
- Revenue for Q1 2025 was $144.5 million, surpassing the high end of the $136 to $140 million guidance range, with an 8% year-over-year growth.
- The company saw a 64% year-over-year growth in revenue from emerging products, driven primarily by compute products.
Negative Points
- The trailing 12-month net retention rate declined to 100%, down from 102% in the prior quarter and 114% in the year-ago quarter.
- Gross margin for Q1 2025 was 57.3%, down 230 basis points from 59.6% in Q1 2024.
- Operating expenses were $88.7 million in Q1 2025, reflecting a 6% sequential growth due to seasonal payroll taxes.
- Security revenue growth was only 7% year-over-year, not yet reflecting the impact of last year's portfolio expansion.
- Concerns remain over potential geopolitical risks affecting TikTok's US operations, with Fastly Inc (FSLY) excluding US TikTok revenue beyond June 19th from its guidance.
