Fastly
FSLY
$29.04
-2.97%
Fastly Inc. is a cloud computing company that provides an edge cloud platform for delivering, securing, and optimizing digital experiences, including content delivery networks, edge computing, and security services. It operates as a niche player in the edge cloud market, differentiating itself through its programmable edge and real-time data processing capabilities, competing with larger providers like Cloudflare and Akamai. The current investor narrative centers on Fastly's turnaround story, driven by accelerating revenue growth, improving profitability, and its strategic positioning in AI-driven edge workloads, though concerns about growth sustainability and valuation persist following a recent stock plunge after Q1 results.…
FSLY
Fastly
$29.04
Related headlines
FSLY 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Fastly's 12-month outlook, with a consensus price target around $27.00 and implied upside of -7.0% versus the current price.
Average Target
$27.00
0 analysts
Implied Upside
-7.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$20 - $32
Analyst target range
The target price range is $20.00 (low) to $32.00 (high), with the high target implying a 6.9% upside and the low target implying a -33.2% downside from the current price. The wide spread of $12.00 (60% of the low target) indicates high uncertainty about Fastly's future performance, likely due to the volatility in its growth trajectory and profitability. Recent ratings from firms like RBC Capital (Sector Perform), KeyBanc (Overweight), and Piper Sandler (Neutral) show a mix of cautious and optimistic views, with no recent upgrades or downgrades, suggesting analysts are waiting for more clarity on the company's ability to sustain growth and achieve profitability.
Bulls vs Bears: FSLY Investment Factors
Fastly presents a compelling turnaround story with accelerating revenue growth, improving margins, and strong momentum in AI-driven edge computing. However, the stock's valuation remains stretched, with negative earnings and a forward PE of 51x, leaving little room for disappointment. The bear case centers on growth deceleration and competitive pressures, while the bull case hinges on sustained AI-driven demand and continued profitability improvements. Currently, the bull case has stronger evidence given the recent earnings beat and positive guidance, but the key tension is whether Fastly can maintain its growth trajectory and achieve profitability without sacrificing growth. If growth decelerates further, the stock could face significant downside, but if AI tailwinds persist, it could re-rate higher.
Bullish
- Accelerating Revenue Growth: Q1 2026 revenue grew 19.76% YoY to $173.0M, up from $144.5M in Q1 2025, with sequential growth from Q4 2025's $172.6M. This marks the third consecutive quarter of accelerating growth, driven by strong demand for edge computing and AI workloads.
- Improving Profitability Trajectory: Net loss narrowed to -$20.5M in Q1 2026 from -$39.1M in Q1 2025, a 48% improvement. EBITDA turned positive at $10.7M in Q4 2025, and gross margin expanded to 62.5% in Q1 2026 from 53.2% a year ago, indicating strong operating leverage.
- Strong Technical Momentum: Stock is up 333% over the past year, significantly outperforming the S&P 500's 20.4% gain. Trading at $29.93, near the 52-week high of $34.82, with a 1-month relative strength of 46.8%, reflecting strong investor conviction in the turnaround.
- AI-Driven Edge Computing Opportunity: Fastly's programmable edge platform is well-positioned for AI workloads, as highlighted in recent news. The company's focus on real-time data processing and edge computing aligns with the growing demand for low-latency AI inference, potentially driving sustained growth.
Bearish
- High Valuation with Negative Earnings: Trailing PS ratio is 2.40x, and forward PS is 1.44x, but the company still has negative EPS of -$0.08. The forward PE of 51.3x implies the market is pricing in significant future profitability, leaving little room for error.
- Growth Deceleration Concerns: Despite Q1's 19.76% YoY growth, this is a deceleration from Q4 2025's 22.8% YoY growth. The stock plunged 14% on April 15 and 35% on May 7 after Q1 results, as investors worried about slowing growth in the core Network Services segment.
- High Volatility and Drawdown Risk: The stock has a max drawdown of -51.6% over the past year, and its beta of 0.36 understates the actual volatility seen in price swings. The 52-week range is wide ($6.84 to $34.82), indicating significant price risk in both directions.
- Intense Competition from Larger Players: Fastly competes with Cloudflare and Akamai, which have larger scale and resources. These competitors can undercut pricing or bundle services, pressuring Fastly's market share and growth sustainability.
FSLY Technical Analysis
Fastly's stock is in a strong uptrend, with a 1-year price change of +333.14%, significantly outperforming the S&P 500's +20.37%. The current price of $29.93 is near the 52-week high of $34.82, sitting at 86% of the 52-week range (calculated as (29.93-6.839)/(34.82-6.839)), indicating strong momentum and bullish sentiment. This positioning near highs suggests the market is rewarding the company's turnaround, but also raises concerns about overextension given the rapid run-up.
Beta
0.36
0.36x market volatility
Max Drawdown
-51.6%
Largest decline past year
52-Week Range
$7-$35
Price range past year
Annual Return
+317.8%
Cumulative gain past year
| Period | FSLY Return | S&P 500 |
|---|---|---|
| 1m | +40.2% | +4.0% |
| 3m | +77.5% | +5.3% |
| 6m | +54.2% | +12.6% |
| 1y | +317.8% | +20.1% |
| ytd | +185.0% | +13.3% |
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FSLY Fundamental Analysis
Fastly's revenue is growing strongly, with Q1 2026 revenue of $173.0 million, up 19.76% YoY from $144.5 million in Q1 2025. The growth trajectory is accelerating, as revenue increased sequentially from $172.6 million in Q4 2025 to $173.0 million in Q1 2026, and the YoY growth rate improved from 22.8% in Q4 2025 to 19.76% in Q1 2026 (though this is a slight deceleration from the prior quarter's 22.8% YoY growth). The Network Services segment, which is the largest at $126.2 million, is the primary driver, while Security ($38.8 million) and Other ($8.0 million) contribute smaller amounts. This growth is driven by increased demand for edge computing and AI workloads, as highlighted in recent news.
Quarterly Revenue
$173021000.0B
2026-03
Revenue YoY Growth
+19.8%
YoY Comparison
Gross Margin
62.5%
Latest Quarter
Free Cash Flow
$54730000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is FSLY Overvalued?
Since Fastly has negative net income (TTM EPS of -$0.08), I selected the Price-to-Sales (PS) ratio as the primary valuation metric, as it is more meaningful for unprofitable companies. The trailing PS ratio is 2.40x, while the forward PS ratio (based on estimated revenue of $1.04 billion) is approximately 1.44x (calculated as market cap of $1.50 billion / forward revenue of $1.04 billion), implying the market expects significant revenue growth. The gap between trailing and forward PS suggests that the market is pricing in a 40% revenue increase, which aligns with the company's growth trajectory.
PE
-12.3x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-188.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant, as Fastly remains unprofitable with a TTM net loss of -$20.5M in Q1 2026, though improving from -$39.1M a year ago. The company has a debt-to-equity ratio of 0.46, indicating moderate leverage, but its negative operating margin of -18.9% and reliance on continued growth to justify valuation pose risks. Free cash flow turned positive at $54.7M TTM, but this is modest relative to the $1.5B market cap, and any slowdown in revenue growth could pressure cash generation. Revenue concentration in Network Services (73% of total) increases vulnerability to segment-specific slowdowns, as seen in Q1's deceleration.