The Analyst’s Bullish Stance
Analyst James Fish from Piper Sandler believes that Fastly Inc is not just another tech company; it holds the ‘magic of possibility.’ Fish recently upgraded Fastly from Neutral to Overweight, showcasing the company’s growth potential that goes beyond the top 10 enterprises in the industry.
Progress Amid Mixed Q4 Results
Despite reporting mixed results for the fourth quarter, Fastly, headquartered in San Francisco, has been steadily gaining market traction. The positive outlook stems from what Fish describes as “multiple upside levers” within the company.
Unlocking Sustainable Growth
According to Fish, various factors contribute to Fastly’s sustainability and potential for growth. These include a favorable competitive landscape, stability in OTT metrics, and innovative new packaging strategies. This amalgamation of strengths acts as a catalyst for the company’s content delivery network (CDN) business.
Diversification is Key
The shift towards diversification is evident as 50% of Fastly’s year-over-year growth is originating from non-Top 10 enterprises. This differentiation is crucial as it reduces the dependency on a handful of major customers, lessening the risks associated with customer concentration.
Strengthening Security Offerings
Furthermore, Fish highlights potential growth avenues within Fastly’s Security business. The introduction of new products such as Bot Management and API Security is projected to bolster total growth by 6% to 8%, thereby expanding the company’s market share in the web security segment.
Market Response
At the time of publication on Monday, Fastly’s stock price had surged by 7.30% to reach $13.44, reflecting investors’ optimism regarding the company’s future prospects.
