• Home
  • Cryptocurrencies
  • Stocks
  • Commodities
  • About
    • Code of Ethics
    • Risk Warning
    • Privacy Policy
  • Contact
rkdream

Type and hit Enter to search

  • Home
  • Cryptocurrencies
  • Stocks
  • Commodities
  • About
    • Code of Ethics
    • Risk Warning
    • Privacy Policy
  • Contact
Fastly
StocksUS

Fastly Stock Price Forecast: Don’t Catch a Falling Knife

Crispus Nyaga
July 11, 2022 3 Mins Read
25 Views
0 Comments

The Fastly stock price plummeted by more than 14% on Monday as concerns about the company’s growth continued. FSLY shares are trading at $11.65, which is the lowest they have been since July 5th. In total, the stock has crashed by more than 91% from its highest level in 2021, bringing its market cap to about $1.4 billion. Similarly, Cloudflare’s stock price has crashed by over 53% in the past 12 months.

Why did FSLY crash?

Fastly is a cloud computing company that many people have never heard about. Yet it is one of the most important companies in the world. Indeed, millions of people use its products every day without even knowing it. For example, it helps companies like Reddit, New York Times, Yelp, and Stripe power their solutions.

Fastly provides services like Content Delivery Network (CDN), Application Delivery Controllers (ADC), and Web Application Firewalls (WAF). As such, if the network goes down, millions of people cannot access important solutions. For example, it is almost impossible to pay for Uber trips since the firm uses Stripe.

The Fastly stock price has been in a deep dive in the past few months as investors worry about the company’s growth and valuation. Analysts believe that the growth that has existed in the past few months will be hard to replicate. Besides, most companies have already invested in CDN and other security solutions. In a note, an analyst at Morgan Stanley wrote the following about Fastly:

“We think risk/reward is relatively less attractive versus our coverage universe where we favor names that are better secularly positioned and effectively executing against their market opportunities such as MongoDB and Datadog.”

Is Fastly a good investment?

Fastly is a vital company that has a strong market share in its industry. Other companies it competes with are Cloudflare, Akamai, Imperva, and Limilight among others. It has managed to get high-level customers  who will continue using its services for a long time.

However, the company faces numerous challenges going ahead. As mentioned, many big companies already have their providers already. As such, the growth path is a bit difficult to map.

Second, Fastly has a long path to profitability. In 2021, its net loss rose to over $222 million from the previous $95 million. It has lost over $236 million in the trailing twelve months. Therefore, while it will continue narrowing its losses, the path to profitability is slim.

Third, like other fintech companies like Waitr and Upstart, there are concerns about the rising interest rates. Historically, companies like Fastly tend to underperform in a period of high-interest rates. More so, analysts expect that companies will slash their IT spending.

Fastly stock price forecast

Fastly stock price

The daily chart shows that the FSLY stock price has been in a strong bearish trend in the past few months. Now, the stock has formed a parallel channel pattern that is shown in blue. It is now approaching the lower side of this channel. It also remains below the 25-day and 50-day moving averages. 

Notably, it has formed what looks like a bearish flag pattern. Therefore, I suspect that the sell-off will continue in the coming weeks as sellers target the support at $8.

Related

Tags:

Fastly

Share Article

Follow Me Written By

Crispus Nyaga

Crispus Nyaga is a financial analyst and trader with more than a decade in the industry. He specializes in financial assets like forex, commodities, indices, stocks, and cryptocurrencies. Crispus has been fortunate to work for well-known financial brands like SeekingAlpha, CoinJournal, Capital.com, FxStreet, iNvezz, Bankless Times, and DailyForex. Crispus is passionate about the financial market and is always willing to share his expertise with people worldwide. He has been featured in top publications like Forbes, Bloomberg, and MarketWatch. His goal is to help experienced and beginner investors find opportunities and maximize their potential.

Other Articles

Previous

Northern Trust Stock Price Forecast Ahead of Earnings Season

silver price
Next

Silver price outlook: XAG/USD en route to pre-pandemic levels?

Next
silver price
July 11, 2022

Silver price outlook: XAG/USD en route to pre-pandemic levels?

Previews
July 11, 2022

Northern Trust Stock Price Forecast Ahead of Earnings Season

No Comment! Be the first one.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

rkdream

rkdream is a fast-growing financial website covering the latest news and analysis on cryptocurrencies, stocks, and commodities.

Quick Links

  • About
  • Code of Ethics
  • Risk Warning
  • Privacy Policy

Categories

  • Cryptocurrencies
  • Stocks
  • Commodities

Follow Us

Twitter

© 2022, All Rights Reserved.

  • Cryptocurrencies
  • Stocks
  • Commodities
Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}