FSLY Stock Risk & Deep Value Analysis
Fastly Inc
Technology • Software - Application
DVR Score
out of 10
What You Need to Know About FSLY Stock
We analyzed Fastly Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran FSLY through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive. Here's what we found.
FSLY Risk Analysis & Red Flags
What Could Go Wrong
Fastly could fail to achieve consistent GAAP profitability and re-accelerate revenue growth above current guidance, leading to sustained investor skepticism and valuation compression. The significant insider selling suggests internal concerns about the company's near-term trajectory amidst fierce competition.
Risk Matrix
Overall
Aggressive
Financial
Medium
Market
Medium
Competitive
High
Execution
Medium
Regulatory
Low
Red Flags
- ⚠
Reported 'negative earnings' for the latest period, contradicting prior profitability statements.
- ⚠
Q1 2026 revenue guidance (16-20% YoY) indicates deceleration from Q4 2025's 22% YoY growth.
- ⚠
Significant insider selling (~$28.9M in 90 days, no purchases) by CEO and other executives.
- ⚠
Median analyst price target ($13.14) is substantially below the current trading price ($23.77), indicating perceived overvaluation.
Upcoming Risk Events
- 📅
Q1 2026 earnings miss on revenue or guidance
- 📅
Further deceleration in revenue growth rate in subsequent quarters
- 📅
Increased competitive pressure from hyperscalers or new entrants
When to Reconsider
- 🚪
Sustained quarterly revenue growth falls below 15% YoY for two consecutive quarters.
- 🚪
Continued GAAP net losses for more than three consecutive quarters without clear path to profitability.
- 🚪
Further significant insider selling without corresponding institutional buying interest or positive catalysts.
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What Does Fastly Inc (FSLY) Do?
Market Cap
$3.61B
Sector
Technology
Industry
Software - Application
Employees
1,100
Fastly, Inc. operates an edge cloud platform for processing, serving, and securing its customer's applications in the United States, the Asia Pacific, Europe, and internationally. The edge cloud is a category of Infrastructure as a Service that enables developers to build, secure, and deliver digital experiences at the edge of the internet. The company offers network services to speed up and optimize the delivery of web and application traffic; content delivery network, such as dynamic site acceleration, origin shield, instant purge, surrogate keys, programmatic control, content compression, reliability features, fanout, domainr, privacy, and modern protocols and performance services; and video/ streaming solutions and services, including live streaming, live event monitoring, video on demand, and media shield. It also provides security solutions, such as DDoS protection, next-gen WAF, bot management, API and ATO protection, advanced rate limiting, privacy, and compliance services; load balancing; image optimization; transport layer security (TLS), platform TLS, and certainly; compute: observability; and origin connect. In addition, the company offers professional services comprising managed and response security services; managed CDN; and support plans services. It serves customers operating in digital publishing, media, technology, online education, travel and hospitality, and financial services industries. The company was formerly known as SkyCache, Inc. and changed its name to Fastly, Inc. in May 2012. Fastly, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.
Visit Fastly Inc WebsiteInvestment Thesis
Fastly is strategically positioned as a leader in the rapidly expanding edge computing and security markets, validated by recent industry recognition. Its developer-centric platform and strong performance capabilities offer significant long-term growth potential as digital transformation accelerates. While current financial inconsistencies and insider selling present near-term headwinds and increased risk, the company's core technology and market position provide a foundation for potential 10x growth within 3-5 years if execution on profitability and re-accelerated growth improves.
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FSLY Price Targets & Strategy
12-Month Target
$27.50
Bull Case
$35.00
Bear Case
$18.00
Valuation Basis
Based on 6x FY26E P/S ratio applied to projected revenue of ~$700M.
Entry Strategy
Dollar-cost average between $20-$24, targeting consolidation around recent support levels. Consider buying on dips below $22.
Exit Strategy
Take 30-50% profit at $33-$35 (near 52-week high). Implement a trailing stop-loss at 15% below entry or key technical support levels like $19.
Portfolio Allocation
5-7% for aggressive risk tolerance, given the high-risk, high-reward nature.
Price Targets & Strategy
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Is FSLY Financially Healthy?
Profitability
Gross Margin
57.08%
Operating Margin
-18.92%
Net Margin
-19.50%
Return on Equity
-12.92%
Revenue Growth
14.78%
EPS
$-0.83
Balance Sheet
Current Ratio
2.61
Quick Ratio
2.47
Debt/Equity
0.39
Cash Flow
Free Cash Flow
$51.26M
Other
Beta (Volatility)
0.44
Does FSLY Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Stable to Expanding
Moat Sources
3 Identified
Fastly's moat is built on technical superiority, developer mindshare, and strong performance requirements for its niche. However, it faces intense, well-funded competition from hyperscalers who can bundle similar services and new entrants, requiring continuous innovation to maintain its edge.
Moat Erosion Risks
- •Aggressive pricing or bundling strategies from larger cloud providers (AWS, Microsoft Azure, Google Cloud).
- •Failure to innovate rapidly enough to maintain a technological lead in a fast-evolving market.
- •Loss of key engineering talent or developer community support.
FSLY Competitive Moat Analysis
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FSLY Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral-Bearish. Despite recent recognition (Forrester Wave), the stock's significant drop from 52-week highs and insider selling likely fuel cautious sentiment.
Institutional Sentiment
Neutral. Analyst consensus is 'Hold' (3 Buy, 6 Hold, 1 Sell), with recent price targets (median $13.14) significantly below current market price.
Insider Activity (Form 4)
CEO Charles Lacey Compton III sold 29,533 shares on April 16-17, 2026 ($720,312). CEO also sold 36,694 shares on March 5, 2026. Insider Scott R. Lovett sold 41,682 shares on March 18, 2026 ($1,102,489). Total insider sales ~$28.9M in the last 90 days with no purchases reported.
Options Flow
Normal options activity; no specific unusual put/call ratio data indicating extreme institutional positioning was identified in the research.
Earnings Intelligence
Next Earnings
2026-05-06 (Q1 2026, after market close)
Surprise Probability
Medium. While the company has shown execution, decelerating guidance and recent market volatility increase the potential for an unexpected miss or beat.
Historical Earnings Pattern
Historically, high-growth tech stocks like Fastly are highly sensitive to revenue growth rates and future guidance. Any sign of re-acceleration or clear profitability path could lead to a rally, while further deceleration or sustained losses typically results in sell-offs.
Key Metrics to Watch
Competitive Position
Top Competitor
Cloudflare (NET)
Market Share Trend
Stable to gaining in specific high-performance or developer-centric edge segments, reinforced by its 'Leader' status in the Forrester Wave for Edge Development Platforms.
Valuation vs Peers
Fastly currently trades at a lower P/S multiple than Cloudflare (NET) but often at a higher FCF multiple due to smaller scale and inconsistent profitability. Analyst targets suggest it's currently overvalued relative to its near-term fundamentals compared to peers if those targets were met.
Competitive Advantages
- •Advanced programmable edge cloud platform with strong developer appeal.
- •High-performance CDN and robust security offerings (WAF, DDoS mitigation).
- •Recognized market leadership in edge development by independent research.
Market Intelligence
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What Could Drive FSLY Stock Higher?
Near-Term (0-6 months)
- •Q1 2026 Earnings Report (May 6, 2026)
- •Continued enhancement of the Compute@Edge platform
Medium-Term (6-18 months)
- •New significant customer wins or major contract announcements
- •Expansion of security offerings and market adoption (e.g., WAAP solutions)
- •Improved macroeconomic conditions driving increased internet traffic and usage-based revenue
Long-Term (18+ months)
- •Accelerated enterprise adoption of edge computing for AI/ML workloads and real-time data processing
- •Strategic acquisitions or partnerships expanding market reach and capabilities
- •Consolidation within the CDN/edge market benefiting platform leaders
Catalysts & Growth Drivers
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What's the Bull Case for FSLY?
- ✓
Consistent re-acceleration of revenue growth to 20%+ YoY.
- ✓
Achievement and sustainment of GAAP net profitability and positive free cash flow margins.
- ✓
Improved analyst sentiment and a reversal of insider selling trends (i.e., insider buying).
Bull Case Analysis
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Competing with FSLY
See how Fastly Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Fastly Inc FSLY | $3.6B | 5.9 | — | $692.0M | -19.5% | 14.8% | |
Apple Inc AAPL | $3.9T | 1.5 | 33.2 | $391.0B | 27.0% | 10.1% | Compare → |
Alphabet Inc GOOGL | $4.7T | 1.0 | 29.1 | $402.8B | 37.9% | 17.4% | Compare → |
Meta Platforms Inc META | — | 5.1 | 15.7 | — | 30.1% | 22.2% | Compare → |
Microsoft Corp MSFT | — | 0.5 | — | — | — | — | Compare → |
NVIDIA Corp NVDA | $4.4T | 5.3 | 38.5 | $215.9B | 55.6% | 65.0% | Compare → |
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How Fastly Inc Makes Money
Fastly operates a global edge cloud platform, essentially a highly distributed network of servers and data centers positioned geographically closer to end-users than traditional centralized cloud infrastructure. This allows businesses to deliver content, applications, and security services with significantly reduced latency, higher performance, and enhanced security. Customers use Fastly's platform to accelerate their websites and applications, provide advanced security features (like WAF and DDoS protection), and build custom logic at the network edge, thereby improving user experience and operational efficiency.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Fastly Inc (FSLY)?
As of April 26, 2026, Fastly Inc has a DVR Score of 5.9 out of 10, placing it in the "Proceed with Caution" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Fastly Inc?
Fastly Inc's market capitalization is approximately $3.6B. The company operates in the Technology sector within the Software - Application industry.
What ticker symbol does Fastly Inc use?
FSLY is the ticker symbol for Fastly Inc. The company trades on the NYQ.
What is the risk level for FSLY stock?
Our analysis rates Fastly Inc's overall risk as Aggressive. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
Is Fastly Inc's revenue growing?
Fastly Inc has reported revenue growth of 14.8%. The company is showing strong top-line momentum.
Is FSLY stock profitable?
Fastly Inc has a profit margin of -19.5%. The company is currently unprofitable.
How often is the FSLY DVR analysis updated?
Our AI-powered analysis of Fastly Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 26, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for FSLY (Fastly Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.