Shares of Fastly (FSLY 1.41%) rose 8.3% on Monday, after an analyst at Citigroup (C +2.13%) upgraded shares of the leading cloud-computing services stock.
NASDAQ: FSLY
Key Data Points
This analyst is more optimistic for Fastly's future
In a note to clients Monday, Citi analyst Fatima Boolani upgraded its rating on Fastly to neutral from sell and significantly raised the firm's per-share price target on the stock to $20 from $11. Fastly closed the day at $20.32 per share.
To justify her relative bullishness, Boolani pointed to Fastly's improved "track record of credibility-rehabilitation under new-ish CEO [Todd] Nightingale, whose product vision and crisper portfolio/packaging strategy should sustained balanced execution."
Indeed, shares of Fastly have nearly doubled over the past year, helped by a combination of solid growth and narrowing losses since Nightingale took the helm in September 2022.
At the same time, Boolani warned of risks stemming from high customer concentration, as well as the recent resignation of Fastly's now-former chief revenue officer, Brett Shirk, who left to pursue other opportunities last month.
What's next for Fastly shareholders?
Fastly is scheduled to release fourth-quarter 2023 results in a few weeks, on Feb. 14. For perspective, the company's latest guidance calls for fourth-quarter revenue of $137 million to $141 million, up around 17% year over year at the midpoint, which should translate to an adjusted (non-GAAP) net loss per share of $0.05 to $0.01, narrowed from an $0.08-per-share loss a year earlier.
Whether Fastly meets, exceeds, or falls short of that guidance might well determine the near-term direction of its stock. But given this incremental positivity from Wall Street in the meantime, it should come as no surprise to see the stock rallying right now.
