Fastly vs Zillow: Better Buy Now?

Fastly (FSLY -3.67%) and Zillow (Z -2.86%) (ZG -2.97%) are two of the better performing stocks of 2020, but many experts think both could have more upside potential.

In this Nov. 9 Fool Live video clip, "Industry Focus" host Jason Moser and Fool.com contributor Matt Frankel, CFP, discuss which could be the better stock to buy right now.

Jason Moser: Sunny says, "Hi, I was looking for some advice on what you'd think would be a better buy right now. I was looking at two different industries. Looking at Fastly, that seems very cheap right now due to the decline in revenue from losing TikTok, or I was looking at Zillow. Thoughts and feedback would be appreciated." Two very different companies, Matt. I think you probably know a little bit more about Zillow than Fastly, but what are your thoughts there? Anything?

Matt Frankel: Well, I know both of them pretty well, I've done a couple of our premium write-ups for Fastly, so I know the company pretty well. I like both companies. Without going too deep into either one of those stocks, I like them both. But what I would say on a day like today is, it's a double great day because all the stocks I always talk about and I own right now are going through the roof. On the other hand, all the stocks that I wanted to own but have been too expensive are going down. So I'll be able to cherry pick some good bargains there and those are both in that category. Fastly is another one I was thinking to pulling the trigger on back in March when it was in the teens and missed the boat on them. Same with Zillow. Zillow was beat down when everyone thought eye-buying was a fad and now it's turning out to not be one. Out of the two, it depends what else is in the portfolio. But if I were going to buy one of those two today, it would probably be Fastly. Just because I think it's more the long-term trend and I really don't think a relatively small decline in guidance is worth the haircut the stock got.

Jason Moser: Yeah. I tend to agree. Zillow, for me, and for the longest time, I didn't know what to think when they would public. You start to see the business there. I felt good about it, and then as time went on, I lost all faith in Spencer Rascoff. He didn't seem like he was doing anything frankly. It just felt like he was cheer-leading the business. Once they made that flip from Spencer to Rich Barton, that's where I thought, wow, this business actually has a chance to do something special because of the vision that Rich laid out there. Part of that with the eye-buying and actually getting in to the housing market, you had to figure they needed to take that step to be something more than just this app where people find houses. I do like where that business has gone. I'm a big believer in the requirements for edge computing as we go on that content delivery network and the edge capabilities that Fastly holds. TikTok, I think could actually turn out to be a little bit of a blessing in disguise. I think that you might see the loss of that revenue or at least the diminished impact from that relationship may create a little bit of short-term concern to give investors an opportunity to mine to a company that has a very big market opportunity in front of it, particularly given the annual revenue that's bringing in, what is it? Not even $300 million annual revenue at this point. Still a fairly small company, I think a big opportunity. I'd probably go Fastly as well. Hopefully that answers your question there. I don't own stock in either one though. What about you, Matt?

Matt Frankel: I do not. I have a short-put option position on Fastly right now, a small one, that I did after their big decline.