Fastly's Near-Term Risks Include Challenges with Top Customers, Analyst Expresses Concern
Portfolio Pulse from Anusuya Lahiri
B of A Securities analyst Tal Liani downgraded Fastly Inc (FSLY) from Buy to Underperform, reducing the price target from $18 to $8, citing near-term risks such as decelerating growth in top customers, share loss in delivery, and limited visibility. Despite a slight beat in quarterly sales and EPS, concerns over future guidance and share loss in the delivery business led to a significant stock price drop. Liani remains positive on Fastly's long-term edge computing prospects but sees it as a 2025 opportunity. Fastly is also part of the IShares U.S. Digital Infrastructure And Real Estate ETF (IDGT) and Themes Cybersecurity ETF (SPAM).
May 02, 2024 | 6:36 pm
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NEGATIVE IMPACT
Fastly was downgraded from Buy to Underperform by B of A Securities, with its price target slashed from $18 to $8 due to near-term risks and concerns over future guidance.
The downgrade and price target reduction reflect significant concerns about Fastly's near-term performance and market position, likely leading to negative investor sentiment and a decrease in stock price.
CONFIDENCE 90
IMPORTANCE 95
RELEVANCE 100
NEGATIVE IMPACT
IShares U.S. Digital Infrastructure And Real Estate ETF (IDGT) includes Fastly in its portfolio, potentially impacting its performance due to Fastly's downgrade and stock price drop.
As Fastly is part of IDGT's portfolio, the downgrade and subsequent stock price decline could negatively affect the ETF's performance, albeit to a lesser extent due to portfolio diversification.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Themes Cybersecurity ETF (SPAM) may be indirectly affected by Fastly's recent downgrade and stock price decrease, given its inclusion in the ETF.
Given Fastly's role in the cybersecurity space and its inclusion in SPAM's portfolio, the negative news and stock performance could indirectly impact SPAM's overall performance, though diversification may mitigate this impact.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50