Fastly ( NYSE: FSLY ) is scheduled to announce Q2 earnings results on Wednesday, August 3rd, after market close.
Ahead of the Q2 report, the content delivery company was downgraded by RBC Capital over worries about a recession and an "unclear turnaround path" without a CEO at the helm.
Morgan Stanley also downgraded Fastly and other tech firms that operate usage-based models with mixed track records of execution and outsized exposures to risk are viewed as less favorable.
MS Analyst Sanjit Singh called out "poorer visibility" going into the second half, a "challenging" spending environment and a consumption model that is likely to show changes in demand sooner than traditional software-as-a-service models.
SA contributors have also been wary of the stock, suggesting that revenue growth and customer acquisition rates are not improving and the company is unlikely to hit long-term targets .
The consensus EPS estimate for Q2 is -$0.17 (-13.3% Y/Y) and the consensus revenue estimate is $101.6M (+19.5% Y/Y).
Fastly's ( FSLY ) Q1 performance missed bottom line expectations, although revenue came above estimates, rising nearly 21% to $102.38M.
The cloud firm and other tech stocks have been hit this year amid investors concerns over rising interest rates, geopolitical upheaval, inflation and prices that just keep rising.
Shares have been up +9.40% ahead of the results, but have fallen -65.48% YTD, and price returns have dropped as well along with peers:
Investors and analysts alike will be looking at management comments on the on-going CEO transition at Fastly, how the company plans to address the CDN market, and more visibility into the security and Edge Cloud businesses.
Over the last 2 years, FSLY has beaten EPS estimates 63% of the time and has beaten revenue estimates 63% of the time.
Over the last 3 months, EPS estimates have seen 0 upward revisions and 11 downward. Revenue estimates have seen 8 upward revisions and 1 downward.
For further details see:
Fastly climbs ahead of Q2 results, but can it overcome bottom line pressures?