Why Fastly Stock Plunged on Friday
Experts who follow the company continued to become more bearish about the company’s prospects.
Edge computing company, not the first in recent times fast (FSLY -3.53%) The analyst price target cut came on Friday. Although this may not have come as an overwhelming surprise to market participants, they nonetheless did not like it. The stock fell 3.5% during the session. S&P 500 The index rose 1.3% and was in positive territory.
New day, new price target cut
Friday’s cutter Morgan Stanley Forecaster Sanjit Singh lowered his Fastly price target by a significant 40%. He believes the stock is worth $12 per share, having previously estimated the fair value to be $20. He maintained equal weight. That is, he did so by holding, that is, buying stocks.
Singh’s move comes two days after the company reported its first-quarter results. Even though revenue rose 14% year-over-year and net loss narrowed (though both companies beat average analyst estimates), investors felt there was a lack of guidance. The company’s full-year forecast range for both revenue and earnings per share were below consensus expert forecasts.
This made Fastly professional followers even more bearish about the company’s future. Before Singh’s target stock price was lowered, bank of america They downgraded the stock very aggressively, dropping two pegs from buy to sell and lowering their price target by 56%.
lose patience
Tech stock investors acknowledge that companies will incur losses as they work to scale their products and services. However, Fastly continues to post huge losses at times. The weak guidance reflected in the first quarter results did not help either. This is a company with an increasingly impatient investor base that wants to see better results.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no positions in any of the stocks mentioned. The Motley Fool holds positions in and recommends Bank of America and Fastly. The Motley Fool has a disclosure policy.
