HomeMarket NewsFastly Poised for Strong Q3 Results, Reiterated Strong Buy by Raymond James

Fastly Poised for Strong Q3 Results, Reiterated Strong Buy by Raymond James

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Financial services firm Raymond James has reiterated its strong buy rating on Fastly, a leading cloud computing services provider.

Fastly, identified by its ticker symbol NYSE:FSLY, is set to announce its third-quarter results on November 1. Despite seeing lower than expected traffic in September, analyst Frank Louthan maintains a positive long-term outlook for the company.

Louthan stated, β€œBased on July through September traffic data, our regression equation implies Fastly would generate approximately $105.5M in CDN-related revenue, translating to approximately $124.2M in total revenue after factoring in our estimated Signal Sciences contribution of $18.7M.”

While Louthan has reduced his third-quarter and full-year revenue estimates, he remains optimistic about the company’s prospects. He now forecasts third-quarter revenue of $124.2M (down from $126.8M) and full-year sales of $506.5M (down from $509.6M).

The consensus among analysts is that Fastly will report a loss of 8 cents per share on $126.89M in revenue for the third quarter.

Louthan also highlighted the potential for Signal Sciences to exceed expectations and offset slower content delivery network revenue. Furthermore, he noted that Fastly’s valuation at approximately 4.5 times estimated enterprise value-to-revenue is aligned with that of other content delivery networks.

β€œWhile we still view these revenue multiples as high, we believe the steady traffic increases will continue to garner attention, especially with recent execution and the appointment of a new CEO,” added Louthan.

In pre-market trading on Thursday, Fastly shares experienced a 2.5% decline.

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