patryk/gist:156faa13d3762be74f59b7beecfabd76

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BARRON'S TAKE
Fastly Stock Is Tumbling. The Company’s Guidance May Be Too Conservative.
Fastly‘s stock is cratering Thursday after the content-delivery-network company’s weak 2022 guidance overshadowed the fourth-quarter report late Wednesday. Some analysts say the projection was simply too conservative.
Fastly (ticker: FSLY) stock is down 30% to $20.12 after the company said it sees 2022 revenue of $400 million to $410 million, and sees a non-GAAP loss for the year of 50 cents to 60 cents a share. Street consensus had been $419 million and a loss of 48 cents a share. For the fourth quarter, Fastly posted a non-GAAP loss of 10 cents a share on revenue of $97.7 million, both of which were better than expected.
RBC analyst Rishi Jaluria wrote in a research note Thursday that he expects Fastly to “stay in the penalty box,” that is, at least until the company’s analyst day in May. He cut his target price for Fastly stock to $20 from $30, but maintained a Sector Perform rating.
“Stepping back, we want to like Fastly’s Edge and Security stories but remain on the sidelines at Sector Perform without sufficient data points,” Jaluria said. “Similarly, the long-term goals seem increasingly difficult for us to underwrite at the company’s existing profile.”
He added that Fastly’s guidance reflects increased conservatism, and that it follows management’s previous rollout of ambitious targets for $1 billion in revenue by 2025.
Raymond James analyst Frank Louthan has similar views on Fastly’s outlook.
“We believe this momentum is continuing into first-quarter 2022, and that the guide that is short of our prior estimate is reflective of a significantly conservative stance around the usage nature of the CDN business and is overly conservative,” Louthan wrote in a research note Thursday morning.
Louthan maintains an Outperform rating on Fastly stock with a price target of $42.
Analyst Jim Breen at William Blair reiterated his Market Perform rating Thursday.
“Although the guidance was below expectations, we believe that the new management team may be taking a conservative approach, and the margin-compression should be temporary as Fastly rolls out its next-generation architecture and invests in the growth of the business,” Breen wrote.
Write to Logan Moore at logan.moore@barrons.com
	BARRON'S TAKE
	Fastly Stock Is Tumbling. The Company’s Guidance May Be Too Conservative.
	Fastly‘s stock is cratering Thursday after the content-delivery-network company’s weak 2022 guidance overshadowed the fourth-quarter report late Wednesday. Some analysts say the projection was simply too conservative.
	Fastly (ticker: FSLY) stock is down 30% to $20.12 after the company said it sees 2022 revenue of $400 million to $410 million, and sees a non-GAAP loss for the year of 50 cents to 60 cents a share. Street consensus had been $419 million and a loss of 48 cents a share. For the fourth quarter, Fastly posted a non-GAAP loss of 10 cents a share on revenue of $97.7 million, both of which were better than expected.
	RBC analyst Rishi Jaluria wrote in a research note Thursday that he expects Fastly to “stay in the penalty box,” that is, at least until the company’s analyst day in May. He cut his target price for Fastly stock to $20 from $30, but maintained a Sector Perform rating.
	“Stepping back, we want to like Fastly’s Edge and Security stories but remain on the sidelines at Sector Perform without sufficient data points,” Jaluria said. “Similarly, the long-term goals seem increasingly difficult for us to underwrite at the company’s existing profile.”
	He added that Fastly’s guidance reflects increased conservatism, and that it follows management’s previous rollout of ambitious targets for $1 billion in revenue by 2025.
	Raymond James analyst Frank Louthan has similar views on Fastly’s outlook.
	“We believe this momentum is continuing into first-quarter 2022, and that the guide that is short of our prior estimate is reflective of a significantly conservative stance around the usage nature of the CDN business and is overly conservative,” Louthan wrote in a research note Thursday morning.
	Louthan maintains an Outperform rating on Fastly stock with a price target of $42.
	Analyst Jim Breen at William Blair reiterated his Market Perform rating Thursday.
	“Although the guidance was below expectations, we believe that the new management team may be taking a conservative approach, and the margin-compression should be temporary as Fastly rolls out its next-generation architecture and invests in the growth of the business,” Breen wrote.
	Write to Logan Moore at logan.moore@barrons.com