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Yellow Flags Fastly's Investors Should Know About

By Jose Najarro – Aug 10, 2021 at 10:30AM

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Investors and analysts were not happy with Fastly's full-year guidance. Is this a buying opportunity for Fastly?

Fastly's (FSLY -3.31%) stock price saw a massive decline after it reported earnings. In today's video I look at Fastly's recent earnings and share some yellow flags investors should be aware of. Here are some highlights from the video. 

  1. On June 8, Fastly experienced a network outage that affected nearly all of its customers. Since customer usage determines Fastly's revenue, the outage hurt its second-quarter results. Fastly also expects a downstream impact on revenue in the near-to-medium term. 
  2. Fastly announced that several customers have delayed projects that were expected to be deployed in Fastly's platform. During the earnings call, Fastly's management team tried to reassure investors that the delay by specific customers had nothing to do with the network outage and that it expects the traffic to come back to the platform, just later than it initially expected.
  3. Due to the outage, delays in projects from numerous customers, and one of the top 10 customers leaving the platform, Fastly updated its third-quarter and full-year guidance. Unfortunately, the updated guidance did not meet expectations, and the numerous yellow flags discussed during earnings have caused some analysts to downgrade Fastly.

Click the video below for my full thoughts and analysis. 

*Stock prices used were the midday prices of Aug. 6, 2021. The video was published on Aug. 6, 2021.

Jose Najarro owns shares of Fastly. The Motley Fool owns shares of and recommends Fastly. The Motley Fool has a disclosure policyJose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Fastly Stock Quote
$9.35 (-3.31%) $0.32

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