Fastly's Price Target Cut By 29% As Near-Term Revenue Growth Missed Its Expectations - Fastly (NYSE:FSLY)

Raymond James analyst Frank Louthan maintained Fastly, Inc FSLY with a Strong Buy and cut the price target from $35 to $25.
Fastly clocked 21% revenue growth to $102.5 million in Q2, beating the consensus of $101.3 million. EPS loss of $(0.23) missed the consensus loss of $(0.17).
Fastly sees Q3 revenue of $102 million - $105 million above the consensus of $100.4 million; EPS loss of $(0.18)-$(0.15) below the consensus loss of $(0.14).
Fastly sees FY22 revenue of $415 million - $425 million above the consensus of $411.03 million; EPS loss of $(0.68)-$(0.63) below the consensus loss of $(0.56).
Fastly named Cisco Systems, Inc's CSCO Todd Nightingale as CEO effective September 1, 2022 succeeding Joshua Bixby.
The firm's proprietary tracking tool correctly predicted Fastly's near-term revenue growth would beat the guidance, despite missing the firm's Street-high forecast, Louthan noted.
He believes the slight raise in full-year guidance and the CEO transition announcement will be well-received over time.
Fastly posted even more substantial traffic sequentially during July relative to June, and he saw the strength carry over through the first ten full days of August.
While he still views Fastly's revenue multiples as high, he believes the steady traffic increases will continue to garner the Street's attention, especially with recent execution and the appointment of a new CEO.
The price target assumes the new leadership and better growth will bring profitability sooner.
Price Action: FSLY shares closed higher by 5.45% at $12.18 on Friday.

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