Key Stats for FSLY Stock
- This-Week Performance: 7%
- 52-Week Range: $5 to $35
- Valuation Model Target Price: around $40
- Implied Upside: about 65%
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What Happened?
Fastly, Inc. stock rose about 7% this week, finishing near $25 per share as investors reacted to strong earnings results that reinforced the company’s shift toward profitability and improving growth. Shares held most of their gains through the week, signaling sustained buying interest following the company’s latest results.
The stock moved higher primarily because Fastly delivered strong earnings results that exceeded company guidance, including accelerating revenue growth, record margins, and its first full year of profitability, which outweighed selling activity from institutional and insider transactions.
JPMorgan Chase & Co. cut its stake by about 45%, while director Scott Lovett sold more than 76,000 shares across multiple transactions worth over $1.8 million, but these moves did not derail the broader positive sentiment.
This week, Fastly reported Q4 revenue of $173 million, up 23% year over year, alongside record gross margins of 64% and a full year of profitability. CEO Kip Compton said the company “exceeded expectations across the board,” as security revenue grew 32% and remaining performance obligations rose 55% to $353.8 million, signaling stronger long-term customer commitments and improved revenue visibility. Management also guided for 2026 revenue of $700 million to $720 million, reinforcing confidence in continued growth.
At the same time, the stock’s move higher came despite several factors that could have pressured shares lower, including institutional selling, insider transactions, and a growth outlook that remains solid but not high-growth by software standards.
Fastly continues to compete with platforms like Cloudflare and Akamai, which operate at greater scale and profitability, leaving investors focused on whether the company can sustain its margin expansion and turn recent momentum into durable earnings growth.
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Is FSLY Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): around 12%
- Operating Margins: around 10%
- Exit P/E Multiple: around 90x
Fastly’s growth is increasingly driven by rising demand for edge computing, where data is processed closer to users to improve speed and reliability, a key requirement for modern applications and AI-driven traffic.
The company’s security products, including web application protection, bot management, and API security, are becoming a larger part of the business, helping drive higher-value contracts and deeper enterprise relationships.
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Growth is also supported by cross-selling multiple products to the same customers, which increases revenue per customer while improving retention and long-term contract visibility, as reflected in rising remaining performance obligations.
Margin expansion is tied to scale, where higher traffic volumes and improved cost discipline allow more revenue to flow through to profit as the platform becomes more efficient.
At current levels, Fastly appears moderately undervalued, with future performance driven by continued revenue growth, expanding margins, and stronger adoption of its edge and security platform.
How Much Upside Does FSLY Stock Have From Here?
Investors can estimate Fastly’s potential share price, or what any stock could be worth, in under a minute using TIKR’s New Valuation Model tool.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
