Shares of Fastly (FSLY +13.89%), an edge-computing specialist, rose rapidly today after the company reported first-quarter sales and earnings that outpaced Wall Street's consensus estimates. A handful of analysts raised their price targets for Fastly stock as a result, boosting investor sentiment further.
Shares were up by 23.5% as of 1:50 p.m. ET on Thursday.
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A solid start to 2025
Fastly reported revenue of $144.5 million in the first quarter, up 8% from the year-ago quarter and ahead of analysts' consensus estimate of $138.2 million. The company's adjusted loss of $0.05 per share was worse than its loss of $0.04 in the year-ago quarter, but still beat Wall Street's consensus estimate of a loss of $0.06.
CEO Todd Nightingale said in prepared remarks, "Fastly outperformed our revenue and operating-loss guidance in the first quarter, delivering positive free cash flow." The company had $8.2 million of free cash flow at the end of the quarter.
NASDAQ: FSLY
Key Data Points
In addition to the better-than-expected results, investors were also happy to see that the company raised its full-year revenue guidance to $590 million, up from its previous outlook of $580 million, both at the midpoint. Many companies have cut their outlook for the year or removed guidance amid tariff and economic uncertainty, so Fastly's raised guidance stands in contrast to the current trend.
The latest results prompted a Piper Sandler analyst to raise the stock's price target from $6 to $7, and a Morgan Stanley analyst raised the target from $7 to $8.
There's still a lot to prove
Fastly delivered solid results in the first quarter, but the company still has a lot to prove. Revenue growth needs to pick up substantially, and the company needs to continue reducing its losses and moving toward profitability before the stock can look compelling.
Despite the quarterly results, I wouldn't jump on the bandwagon for buying this stock until it's very clear that the company can grow sales at a healthy pace and its losses have narrowed significantly.
