FSLY - Fastly Is Just A CDN: Mixed Q1 Results And A Lower Outlook Send It Tumbling

2024-05-02 15:58:11 ET

Summary

• Fastly's stock is down significantly in recent months on the back of deteriorating revenue growth and weak guidance.
• While market conditions may be softening, it appears that Fastly's problems are in large part due to competition.
• The scope of Fastly's business has increased in recent years but it primarily remains a high-performance CDN, placing the company at the mercy of competitors with larger strategic considerations.
• Continued growth, positive cash flows and a low valuation could begin to support Fastly's stock at some point but there is a high probability that this is a value trap.

I last wrote about Fastly ( FSLY ) in November, suggesting that the company continued to face demand issues, customer concentration and an unfavorable cost structure. The stock is down close to 50% since then, with Fastly reporting poor results in Q4 2023 and Q1 2024....

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