Fastly Sinks More Than 27% Despite Upbeat Q4 Results

Cloud computing services provider Fastly, Inc. (NYSE: FSLY) has reported better-than-expected results for the fourth quarter ended December 31, 2021. The strong results were on the back of considerable growth in revenues.

However, shares of the company sank more than 27% to close at $21.06 in Wednesday’s extended trading session. The decline can be attributed to the muted guidance provided by the company.

Revenue & Earnings

Fastly reported quarterly revenues of $97.72 million, up 18.2% from the same quarter last year. Further, the figure surpassed the consensus estimate of $92.44 million.

The company reported a loss of $0.10 per share, wider than the loss of $0.09 reported in the prior-year quarter. Yet, the figure came in narrower than the consensus estimate of a loss of $0.16 per share.

Fastly’s Trailing 12-month net retention rate and Dollar-Based net expansion rate stood at 118% and 121%, respectively, at the end of the quarter.

The company had 2,804 customers at the end of the quarter, of this 445 were enterprise customers.

Outlook

For the first quarter, the company expects to post revenues in the range of $97 million to $100 million. The consensus estimate for the same stands at $97.98 million. Further, it anticipated incurring a loss between $0.15 per share and $0.13 per share. Analysts expect the company to report a loss of $0.13 per share.

Similarly, for the full Fiscal Year 2022, Fastly foresees revenues in the range of $400 million to $410 million against the consensus estimate of $418.98 million. During this period, the company anticipates a loss per share in the range of $0.60 to $0.50. The consensus estimate for the same stands at $0.48 per share.

CEO Comments

The CEO of Fastly, Joshua Bixby, said, “Our foundational technology, differentiated by the scale and efficiency of our network, continues to attract and empower enterprise developers in their moments of inspiration. Coupled with a strong roadmap of new products, including our recent launch of Fastly’s Next-Gen WAF, the industry’s first and only unified WAF, we are excited about our opportunities in 2022 as we expand our network and capture the future growth potential of our edge cloud network.”

Stock Rating

Consensus among analysts is a Hold based on 1 Buy, 4 Holds and 1 Sell. The average Fastly stock prediction of $35.75 implies upside potential of 23.57% from current levels. Shares have declined 69.5% over the past year.

Negative Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on FSLY, as 7.7% of portfolios tracked by TipRanks decreased their exposure to FSLY stock over the past 30 days.

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