- RBC Capital analyst Rishi Jaluria maintained Fastly Inc FSLY with an Underperform and raised the price target from $6 to $9.
- Fastly delivered solid Q4 results but a mixed 2023 outlook, in Jaluria's view.
- The revenue growth was solid, margins continued to improve, and the analyst liked the business trajectory under new CEO Todd Nightingale's leadership.
- However, the guidance does not appear de-risked, cash burn remains a concern, the turnaround is still unproven, and his cautions on competition remain unchanged.
- Credit Suisse analyst Rich Hilliker maintained a Neutral and raised the price target from $9.50 to $11.50.
- Fastly's Q4 revenue was in line, excluding one-time events, and profitability was better than expected.
- Nightingale appears to be righting the ship, with early signs of enterprise momentum, improvements to operational rigor, and diligent cost management.
- Pricing and packaging changes are likely to launch in Q2 and could offer a meaningful opportunity to reduce adoption friction, increase velocity, and create greater visibility.
- Raymond James analyst Frank G. Louthan, IV reiterated Strong Buy with a $25 price target.
- Louthan's proprietary tracking tool correctly predicted Fastly's quarterly revenue would beat the guidance and believed the ongoing execution combined with elevated full-year guidance would be well-received by investors.
- While the analyst views the 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.
- His re-rating assumed that the new leadership and better growth would bring profitability sooner.
- Oppenheimer analyst Timothy Horan had a Perform rating.
- FSLY executing its goals to simplify service packages, expand security offerings, invest in Compute@Edge, align GTM, and implement cost controls should enable it to make the Internet a better place. They likely have unique edge delivery capabilities when demand should increase.
- The company's new packaging and ability to upsell existing customers with security and edge computing is a significant driver of improved results.
- The new CEO has executed very well in the last six months, and FCF margins seem to have bottomed.
- The company is likely gaining some share from peers Radware Ltd RDWR, Akamai Technologies, Inc AKAM, and potentially Cloudflare, Inc NET.
- Price Action: FSLY shares traded higher by 21.67% at $16.88 on the last check Thursday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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