What's Going On With Fastly Stock After Earnings?

Zinger Key Points
  • DA Davidson analyst Rudy Kessinger downgrades Fastly from Buy to Neutral and lowers the price target from $24 to $8.50.
  • B of A Securities analyst Tal Liani downgrades Fastly from Buy to Underperform and lowers the price target from $18 to $8.

Fastly, Inc. FSLY shares are falling Thursday after the company issued weak second-quarter and fiscal year guidance.

The Details:

Fastly reported better-than-expected quarterly results, however, the company issued forward-looking guidance below the analysts' estimates. 

Fastly sees second-quarter losses between 6 cents and 10 cents per share, versus the losses of 2 cents per share estimate. The company expects second-quarter revenue in a range of $130 million and $134 million, versus the $140.16 million analyst estimate.

The company sees full-year 2024 losses of between 6 cents and 12 cents per share, versus the loss of 3 cents estimate, and full-year revenue in a range of $555 million and $565 million, versus the $584.59 million estimate.

"I am pleased with the first quarter operating performance, posting non-GAAP operating loss above our guidance and positive cash flow from operations," said Todd Nightingale, CEO of Fastly. "But, we're not satisfied with our revenue growth outlook."

B of A Securities downgraded Fastly from Buy to Underperform and lowered the price target from $18 to $8 following the print. DA Davidson also downgraded Fastly from Buy to Neutral and lowered its price target from $24 to $8.50.

Related News: Enovix Stock Soars On Blockbuster Q1 Sales

Should I Sell My FSLY Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of Fastly have lost 31.1% year to date. This compares to the average annual return of -40.61%, meaning the stock has outperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Fastly stock currently has an RSI of 60.76, indicating neutral conditions.

For analysis tools, charting data and access to exclusive stock news, check out Benzinga PRO. Try it for free.

FSLY Price Action: According to Benzinga Pro, Fastly shares are down 34.6% at $8.45 at the time of publication Thursday. 

Image: Mohamed Hassan from Pixabay

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