Fastly (FSLY) AI Stock Analysis

• Market Cap: $1.07B
• Dividend Yield: N/A
• Average Volume (3M): 2.69M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.28
• Revenue Growth: 7.43%
• EPS Growth: 16.14%
• Country: US
• Employees: 1,100
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Application
• EPS (TTM): -0.03
• Shares Outstanding: 147,400,000
• 10 Day Avg. Volume: 2,470,245
• 30 Day Avg. Volume: 2,693,410
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 1.96
• Enterprise Value/Gross Profit: 3.69
• Enterprise Value/Ebitda: -20.43
• 1Y Price Target: $8.00
• Price Target Upside: 10.04% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 58 Neutral
• Price Target: $7.50 ▲(3.16% Upside)

Fastly's overall stock score reflects strong revenue growth and strategic initiatives to enhance market positioning. However, ongoing profitability challenges and leadership transitions present risks. The stock's valuation is impacted by negative earnings, and technical indicators show mixed signals. Despite these challenges, positive earnings call outcomes and corporate events contribute to a moderately positive outlook.

Positive Factors

Earnings

Fastly delivered a strong quarter, beating consensus for both revenue and pro forma EPS with strong results attributed to stronger new customer acquisition, favorable pricing, and improved go-to-market execution.

Product Development

Compton expanded Fastly’s security portfolio with enhanced DDoS and bot management solutions and next-gen WAF features.

Strategic Focus

The combination of a stronger go-to-market focus coupled with faster new product releases should allow for net retention and other metrics to improve over time.

Negative Factors

Financial Performance

The company has yet to achieve positive operating income and free cash flow, indicating financial challenges.

Leadership Change

Fastly announced its CEO, Todd Nightingale, will be stepping down to pursue an opportunity at Arista Networks.

Market Challenges

Fastly faces challenges in combating the industry norm of declining CDN pricing, which has been decreasing at a high-teens rate.

Fastly Business Overview & Revenue Model

Company Description

Fastly, Inc. is a technology company specializing in edge cloud platforms designed to accelerate application performance and deliver content efficiently. Founded in 2011 and headquartered in San Francisco, California, Fastly operates primarily in the cloud computing sector, focusing on content delivery network (CDN) services, edge computing, and application delivery solutions. The company's core products include its CDN, real-time analytics, and security services, which help businesses optimize their digital presence and enhance user experiences across various platforms.

How the Company Makes Money

Fastly generates revenue primarily through its subscription-based model, offering tiered pricing plans for its CDN and edge computing services. Revenue streams include usage-based fees, where clients pay for the amount of data transferred and processed through Fastly's network, as well as monthly subscription fees for access to its suite of tools and services. The company also benefits from significant partnerships with tech giants and a range of enterprises across various industries, which contribute to its customer base and recurring revenue. Additionally, Fastly invests in expanding its service offerings and capabilities, which helps attract new clients and drive revenue growth.

Fastly Financial Statement Overview

Summary

Fastly shows revenue growth and a strong gross margin, but faces profitability and cash flow challenges with negative income margins and free cash flow. The balance sheet is stable with moderate leverage, yet operational efficiency and profitability need improvement.

Income Statement

Fastly's income statement shows a consistent growth in revenue over the years, with a TTM revenue of $554.63 million, marking a 2.02% increase from the previous year. However, the company is experiencing negative net income and EBIT margins, indicating profitability challenges. The gross profit margin is 53.19%, which is relatively strong, but the negative net profit margin of -27.72% suggests ongoing struggles with cost management.

Balance Sheet

The balance sheet reflects a healthy equity ratio of 66.05%, showing a stable capital structure dominated by equity. The debt-to-equity ratio is 0.42, which indicates a moderate level of leverage, suggesting manageable debt levels. However, the return on equity is negative at -16.06%, highlighting the impact of net losses on shareholder returns.

Cash Flow

Fastly's cash flow statement reveals a negative free cash flow, though it improved from prior years. The operating cash flow to net income ratio is negative, indicating that cash generated from operations is insufficient to cover net losses. Free cash flow to net income ratio is also negative, underscoring liquidity challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	570.97M	543.68M	505.99M	432.73M	354.33M	290.87M
Gross Profit	302.92M	295.94M	266.33M	209.78M	187.33M	170.87M
EBITDA	-54.73M	-79.07M	-19.01M	-81.85M	-167.35M	-77.29M
Net Income	-147.59M	-158.06M	-133.09M	-190.77M	-222.70M	-95.93M
Balance Sheet
Total Assets	1.46B	1.45B	1.53B	1.90B	2.15B	1.16B
Cash, Cash Equivalents and Short-Term Investments	321.21M	295.88M	322.72M	517.97M	527.86M	194.18M
Total Debt	410.26M	404.66M	433.32M	833.54M	1.05B	90.53M
Total Liabilities	520.53M	486.11M	545.70M	940.96M	1.14B	158.09M
Stockholders Equity	942.65M	965.25M	979.49M	955.16M	1.01B	1.00B
Cash Flow
Free Cash Flow	28.28M	-20.81M	-31.91M	-149.95M	-88.87M	-59.09M
Operating Cash Flow	53.31M	16.41M	362.00K	-69.63M	-38.48M	-19.92M
Investing Cash Flow	-111.61M	178.90M	294.94M	235.75M	-794.51M	-276.68M
Financing Cash Flow	-6.62M	-17.10M	-331.38M	-189.15M	936.55M	274.40M

Fastly Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 7.27 is above the 20-day moving average (MA) of 7.00, above the 50-day MA of 6.99, and below the 200-day MA of 7.69, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 57.31 is Neutral, neither overbought nor oversold. The STOCH value of 65.40 is Neutral, 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
YALA	78 Outperform	$1.25B	9.90	21.16%	―	6.79%	12.97%
VMEO	72 Outperform	$687.70M	54.68	3.26%	―	-1.35%	-59.67%
VTEX	63 Neutral	$748.91M	76.10	5.33%	―	4.51%	8241.83%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%
DSP	59 Neutral	$635.81M	300.60	5.20%	―	30.92%	―
FSLY	58 Neutral	$1.07B	―	-15.34%	―	7.43%	16.14%
BLND	50 Neutral	$899.85M	―	-93.00%	―	-4.76%	67.62%

Fastly Corporate Events

Fastly Announces Executive Changes and Record Revenue

On August 6, 2025, Fastly announced executive changes with Richard Wong appointed as Chief Financial Officer effective August 11, 2025, and Scott R. Lovett as President, Go to Market, effective immediately. These appointments are part of a strategic shift to enhance the company’s market positioning and operational efficiency. Additionally, Fastly reported record revenue of $148.7 million for the second quarter of 2025, surpassing guidance and prompting an increase in financial projections for the year. This financial performance reflects successful customer acquisition strategies and increased market share, positioning Fastly for continued growth and positive cash flow.

Fastly Announces New CEO Amid Leadership Transition

On June 13, 2025, Fastly, Inc. announced the resignation of Todd Nightingale as CEO and President, effective June 16, 2025, with his advisory role continuing until June 30, 2025. Charles ‘Kip’ Compton, previously the Chief Product Officer, has been appointed as the new CEO, bringing over 25 years of senior leadership experience in cloud, video, and networking. The transition is expected to strengthen Fastly’s business and maintain its strategic momentum, as Compton has been instrumental in accelerating the company’s portfolio strategy and growth. Fastly also reaffirmed its financial guidance for the second quarter and full year 2025.

Fastly Holds 2025 Annual Stockholders Meeting

On June 11, 2025, Fastly, Inc. held its 2025 Annual Meeting of Stockholders, where key decisions were made regarding the election of directors, the ratification of Deloitte & Touche LLP as the independent registered public accounting firm, and the approval of executive compensation. All three directors proposed were elected to serve until the 2028 Annual Meeting, Deloitte & Touche LLP’s selection was ratified, and the executive compensation was approved on an advisory basis, reflecting shareholder support for the company’s governance and financial strategies.