Fastly (FSLY) AI Stock Analysis

• Market Cap: $2.81B
• Dividend Yield: N/A
• Average Volume (3M): 9.75M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.27
• Revenue Growth: 9.45%
• EPS Growth: 11.76%
• Country: US
• Employees: 1,100
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.12
• Shares Outstanding: 149,400,000
• 10 Day Avg. Volume: 22,887,534
• 30 Day Avg. Volume: 9,750,283
• PEG Ratio: 0.45
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 2.40
• P/FCF Ratio: 22.74
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 4.73
• Enterprise Value/Gross Profit: 8.40
• Enterprise Value/Ebitda: -169.68
• 1Y Price Target: $13.40
• Price Target Upside: -25.84% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 0.13
• Revenue Forecast (FY): $667.79M

• Rating: 70 Outperform
• Price Target: $10.00 ▼(-44.66% Downside)

The score is driven primarily by improving fundamentals (stronger cash flow, better margins, and reduced leverage) and a notably upbeat earnings call with profitable-growth guidance. Offsetting this are mixed technical momentum (negative MACD and price below key mid-term averages) and limited valuation support due to a negative P/E and no dividend.

Positive Factors

Cash Generation

Fastly's shift to positive operating and free cash flow (TTM OCF ~$94M, FCF ~$61M) represents a durable structural improvement. Consistent cash generation increases financial flexibility to fund growth, sustain operations through demand cycles, and reduces reliance on dilutive financing, supporting longer-term investment and stability.

Margin Expansion & Profitability

Sustained gross-margin expansion (record Q4 64% and FY26 guidance ~63%) plus guidance for meaningful non‑GAAP operating profit signals durable operating leverage and pricing or cost advantages. Higher margins improve cash conversion and provide room to invest in product development while materially strengthening the path to sustained profitability.

Product Momentum & Contracted Backlog

Strong product traction—110% NRR, RPO up 55%, and rapidly growing security revenue—indicates durable demand, successful cross-sell, and higher customer stickiness. A growing contracted backlog improves revenue visibility and supports repeatable, consumption-linked expansion across edge, security and compute offerings over the medium term.

Negative Factors

Negative Returns & Ongoing Accounting Losses

Despite operational improvements, negative ROE (~-13% TTM) and lingering accounting losses limit the company's ability to compound shareholder value from equity. Continued GAAP losses would constrain return generation versus peers and require sustained profitable growth to convert balance-sheet strength into durable equity returns.

Customer Concentration & Consumption Volatility

A relatively high top‑10 concentration (34% of revenue) combined with a consumption-driven pricing model increases revenue volatility and sensitivity to a few large accounts. This structural exposure can produce outsized swings in results and makes multi-quarter visibility and forecasting less reliable without further customer diversification.

Rising Infrastructure CapEx & Component Cost Pressure

Planned infrastructure CapEx normalization to 10%–12% of revenue and elevated memory/component costs raise the firm's capital intensity and operating cost base. Over the medium term, higher ongoing CapEx and input-price pressure could constrain margin gains and require sustained higher cash generation to support capacity and product performance.

Fastly Business Overview & Revenue Model

Company Description

Fastly, Inc. operates an edge cloud platform for processing, serving, and securing its customer's applications in the United States, the Asia Pacific, Europe, and internationally. The edge cloud is a category of Infrastructure as a Service that enables developers to build, secure, and deliver digital experiences at the edge of the internet. It is a programmable platform designed for web and application delivery. The company offers Compute@Edge; developer hub that includes solution library patterns and recipes, API and language references, change logs, and Fastly Fiddle solutions; device detection and geolocation, edge dictionaries, edge access control lists, and edge authentication services; full site delivery services, such as dynamic site acceleration, origin shield, instant purge, surrogate keys, real-time logging and stats, cloud optimizer, programmatic control, edge databases, content compression, reliability, and modern protocols and performance services; and streaming solutions and services, including live streaming, media shield, and origin connect. It also provides edge security solutions, such as DDoS protection and cloud, edge web application firewall (WAF), transport layer security (TLS), platform TLS, and compliance services; unified web application and API protection solutions that includes runtime self-application protection, advanced rate limiting, API and ATO protection, account takeover protection, bot protection, and next generation WAF. In addition, the company offers edge applications, such as load balancers and image optimizers; video on demand; and managed edge delivery services. It serves customers operating in digital publishing, media and entertainment, technology, online retail, travel and hospitality, and financial services industries. The company was formerly known as SkyCache, Inc. and changed its name to Fastly, Inc. in May 2012. Fastly, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

How the Company Makes Money

Fastly generates revenue primarily through a subscription-based model, charging customers for its CDN services based on usage metrics such as data transfer and requests processed. The company has tiered pricing plans that cater to a variety of business sizes, allowing for scalability as customer needs grow. Key revenue streams include fees from data delivery, additional services like security features, and add-ons such as image optimization. Significant partnerships with major tech companies and integrations with platforms like AWS and Google Cloud also contribute to its earnings by expanding its market reach and enhancing service offerings.

Fastly Financial Statement Overview

Summary

Financials are improving meaningfully: margins are expanding, leverage is low (debt-to-equity ~0.12), and cash generation is strong with TTM operating cash flow of ~$94M and free cash flow of ~$61M. The main drag is that profitability is still not consistently established across the TTM period and revenue growth has been modest versus earlier years.

Income Statement

TTM (Trailing-Twelve-Months) revenue grew 5.4% and gross margin improved to ~56% (up from ~54% in 2024), indicating decent pricing/premiums and/or cost discipline. Losses are narrowing meaningfully: EBIT margin improved to about -15% (from ~-28% in 2024) and net margin improved to about -19% (from ~-29%). The key weakness remains ongoing unprofitability (negative EBIT/EBITDA and net income), and revenue growth has decelerated sharply versus earlier years, limiting operating leverage.

Balance Sheet

Leverage improved materially: debt-to-equity fell to ~0.12 in TTM (Trailing-Twelve-Months) from ~0.42 in 2024 and ~0.87 in 2022, which lowers financial risk and increases flexibility. Equity remains substantial (~$930M) relative to total assets (~$1.50B). The main concern is that returns on equity are still negative (about -13% TTM), reflecting continued losses and limiting the balance sheet’s ability to compound value without sustained earnings improvement.

Cash Flow

Cash generation has turned into a clear strength: TTM (Trailing-Twelve-Months) operating cash flow was ~$94M and free cash flow was ~$61M, with very strong free-cash-flow growth (~40%). This is a major improvement from 2023–2024 when free cash flow was negative. A remaining watch item is that accounting losses persist, and cash flow strength will need to prove durable through different demand environments.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	624.02M	543.68M	505.99M	432.73M	354.33M
Gross Profit	356.20M	295.94M	266.33M	209.78M	187.33M
EBITDA	-20.57M	-79.07M	-19.01M	-120.48M	-167.35M
Net Income	-121.68M	-158.06M	-133.09M	-190.77M	-222.70M
Balance Sheet
Total Assets	1.50B	1.45B	1.53B	1.90B	2.16B
Cash, Cash Equivalents and Short-Term Investments	361.76M	295.88M	322.72M	517.97M	527.86M
Total Debt	430.19M	404.66M	433.32M	833.54M	1.05B
Total Liabilities	569.90M	486.11M	545.70M	940.96M	1.15B
Stockholders Equity	929.58M	965.25M	979.49M	955.16M	1.01B
Cash Flow
Free Cash Flow	65.75M	-20.81M	-31.91M	-149.95M	-88.87M
Operating Cash Flow	94.44M	16.41M	362.00K	-69.63M	-38.48M
Investing Cash Flow	-213.03M	178.90M	294.94M	235.75M	-794.51M
Financing Cash Flow	12.76M	-17.10M	-331.38M	-189.15M	936.55M

Fastly Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSLY, the sentiment is Positive. The current price of 18.07 is above the 20-day moving average (MA) of 11.32, above the 50-day MA of 10.54, and above the 200-day MA of 8.71, indicating a bullish trend. The MACD of 2.03 indicates Negative momentum. The RSI at 77.40 is Negative, neither overbought nor oversold. The STOCH value of 88.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FSLY.

Fastly Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FSLY	70 Outperform	$2.81B	-21.70	-12.84%	―	9.45%	11.76%
SEMR	69 Neutral	$1.79B	-385.02	-1.68%	―	19.87%	-136.93%
PD	62 Neutral	$637.85M	4.18	70.46%	―	7.01%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AMPL	59 Neutral	$959.87M	-10.66	-32.68%	―	12.78%	-20.47%
BLND	50 Neutral	$454.56M	-17.30	―	―	-15.41%	71.18%

Fastly Corporate Events

Fastly Delivers Record Q4 2025 Results, Achieves Profitability

Fastly reported record fourth-quarter and full-year 2025 results on February 11, 2026, with revenue rising 23% year over year in the quarter to $172.6 million and 15% for the full year to $624.0 million. The company posted record gross margins, sharply narrowed its GAAP net loss, and turned to non-GAAP profitability and positive free cash flow as security and other high-growth offerings outpaced core network services.

Key customer and contract metrics underscored strengthening demand, with remaining performance obligations jumping 55% to $354 million and net retention improving to 110%, while enterprise customer count and top-10 customer concentration both increased. Fastly also bolstered its balance sheet with a convertible notes refinancing and expanded its product portfolio across API security, observability, compute performance and AI-based tools, moves that reinforce its competitive positioning in edge cloud and application security markets.

The most recent analyst rating on (FSLY) stock is a Hold with a $9.00 price target. To see the full list of analyst forecasts on Fastly stock, see the FSLY Stock Forecast page.

Fastly Finalizes $20M Convertible Notes Offering

Fastly, Inc., a provider of cloud-based solutions, announced the issuance of additional $20 million worth of 0% Convertible Senior Notes due 2030, as part of a private offering initially closed on December 9, 2025. On December 17, 2025, the company finalized the sale, resulting in net proceeds of $19.4 million, which will partially be used for privately negotiated capped call transactions aimed at reducing dilution or offsetting cash payments tied to note conversions. These capped call transactions, with a cap price of $23.04 per share, are designed to mitigate potential operational impacts on the company’s equity.

The most recent analyst rating on (FSLY) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Fastly stock, see the FSLY Stock Forecast page.

Fastly Issues $160M Convertible Notes with Capped Call

On December 9, 2025, Fastly, Inc. issued $160 million in 0% Convertible Senior Notes due 2030, with an option for initial purchasers to acquire an additional $20 million. These notes are senior unsecured obligations and will mature on December 15, 2030, with various conversion and redemption options available to noteholders. Concurrently, Fastly entered into capped call transactions to mitigate potential stock dilution from note conversions and used proceeds to repurchase $150 million of its 2026 notes, potentially impacting the trading price of its Class A Common Stock.

The most recent analyst rating on (FSLY) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Fastly stock, see the FSLY Stock Forecast page.

Fastly to Transfer Stock Listing to Nasdaq

On November 26, 2025, Fastly, Inc. announced its decision to transfer the listing of its Class A common stock from the New York Stock Exchange to the Nasdaq Global Select Market, effective December 9, 2025. This strategic move aligns Fastly with a growth-driven market and is part of its broader transformation efforts to unlock long-term value for customers and shareholders. The company will continue trading under the ticker symbol ‘FSLY’.

The most recent analyst rating on (FSLY) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Fastly stock, see the FSLY Stock Forecast page.