Among the numerous tech sector winners this earnings season has been edge computing company Fastly (NYSE: FSLY). Buoyed by encouraging quarterly results and subsequent analyst price target bumps, the company’s stock was up by a muscular 30% week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence.
A quarterly double beat
Fastly posted its first-quarter figures just after market close on Wednesday, touting the fact that its revenue hit a record $144.5 million. This was an 8% improvement year over year, and also beat both its own guidance and the average analyst estimate of $138 million. Non-GAAP (adjusted) net loss deepened but not dramatically so, at $6.6 million against the year-ago deficit of $5.3 million.
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Both headline figures topped the consensus analyst estimates.
Guidance for both the company’s current (second) quarter and the entirety of 2025 more or less jibed with pundit projections, save for annual revenue. Fastly boosted the latter forecast to a range of $585 million to $595 million, which starts above the consensus professional estimate of $578 million.
A trail of red ink
As often happens with estimates-topping quarterly results, several analysts were quick to get incrementally more bullish on Fastly’s future. A clutch raised their price targets on the company’s stock, including Piper Sandler’s James Fish. In bumping his higher by $1 to $7 per share, according to reports, Fish cited the exit of onetime competitor Edgio, among other factors, as a reason.
He did, however, maintain his neutral recommendation on the stock.
I don’t feel that’s a reasonable call. There was much to like in Fastly’s first quarter but to me its growth isn’t all that hot, and the company’s still posting net losses. To me, its stock isn’t a compelling buy candidate.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fastly. The Motley Fool has a disclosure policy.
