Fastly’s Stock Soars Following Analyst Upgrade
Monday marked a triumphant start to the final month of the year for Fastly (NYSE: FSLY), with its stock surging over 16% after an analyst upgrade. This impressive performance far outpaced the S&P 500 index, which only managed a meager 0.2% gain.
A Vote of Confidence from Oppenheimer’s Tim Horan
The driving force behind Fastly’s remarkable rise was Oppenheimer analyst Tim Horan, who upgraded the content delivery network (CDN) specialist from a “perform” to an “outperform” rating. Horan’s newfound optimism is rooted in recent developments within the CDN segment.
A Shift in the Landscape
In September, competitor Edgio filed for Chapter 11 bankruptcy protection, prompting a significant restructuring effort. Horan believes this shift will ultimately benefit both Fastly and peer Akamai. Akamai recently secured court approval to acquire roughly $100 million worth of Edgio’s client contracts, a move that could generate significant revenue.
Fastly Stands to Gain
Horan estimates that Fastly will reap around $40 million from Edgio’s struggles, a substantial windfall considering the company’s trailing-12-month revenue figure is less than $541 million. While it may seem unseemly to capitalize on another company’s misfortune, the reality is that this development creates a “better with fewer” scenario for both Fastly and Akamai.
A Note of Caution
Before investing in Fastly, it’s essential to consider the bigger picture. The Motley Fool Stock Advisor analyst team has identified what they believe are the top 10 stocks for investors to buy now, and Fastly didn’t make the cut. These 10 stocks have the potential to produce extraordinary returns in the coming years.
Expert Guidance for Savvy Investors
The Stock Advisor service provides investors with a clear roadmap for success, including portfolio-building guidance, regular updates from analysts, and two new stock picks each month. Since 2002, Stock Advisor has more than quadrupled the return of the S&P 500.
Leave a Reply