Why Fastly Stock Is Dropping Today

Fastly, Inc. FSLY shares are dropping Thursday after the company reported mixed fourth-quarter financial results and issued guidance Wednesday after the bell.

The Details:

Fastly reported quarterly earnings of 1 cent per share, which beat the analyst consensus estimate of a 2 cent loss. It is an increase over losses of 8 cents per share from the same period last year.

The company reported quarterly sales of $137.78 million, missing the analyst consensus estimate of $139.46 million by 1.21% and representing a 15.47% increase over sales of $119.32 million year-over-year.

Craig-Hallum analyst Jeff Van Rhee downgraded Fastly from Buy to Hold and announced a $20 price target on Thursday.

Fastly shares are dropping on heavy trading volume as investors digest the earnings report. According to data from Benzinga Pro, more than 16.17 million shares have been traded in the session, compared to the stock’s 100-day average of 2.845 million shares.

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FSLY Stock Prediction 2024

Fastly’s revenue growth in FY23 was 16.93%, reflecting the influence of various factors including the macroeconomic environment, demand for its products and services, and its position relative to competitors. This growth is a critical indicator for investors assessing the company’s future prospects.

Some macro factors that could impact the company's performance in the next year include higher interest rates, progress on reeling in inflation and labor market strength. The Fed's benchmark rate is currently at 5.33%, while PPI recently came in at -0.2%, growing 2.0% from last year. The unemployment rate was most recently reported as 3.7%.

An investor should pay attention to economic conditions to decide whether they think the macro environment is positive or negative for Fastly stock. For real time economic data and breaking market updates, check out Benzinga Pro. Try it for free.

How does this stack up against Fastly's peers?

Investors may also want to analyze a stock in comparison to companies with similar products or in similar industries. Fastly operates in the Information Technology sector. The stock has experienced average annual growth of -44.72% compared to the -22.09% average of its peer companies. This is below the broader sector movement of Fastly.

FSLY Price Action: According to Benzinga Pro, Fastly shares are down 30.8% at $16.30 at the time of publication.

Image: Mohamed Hassan from Pixabay