Han Lue | The Fast and The Furious: Tokyo Drift (2006)
I suggest that you make the choice to hitch a ride and don't look back. This is the best advice I can give you when it comes to Fastly, Inc. (NYSE:FSLY). This company is as hot as they come, hotter than work-from-home beneficiaries such as Zoom Video Communications, Inc. (ZM), and Shopify Inc. (SHOP), two wall street darlings.
(Source: Yahoo Finance/MS Paint)
Fastly is right in the middle of a paradigm shift called digital transformation, a pedal-to-the-metal shift that is in full acceleration as a result of the work-from-home mandate. While the connection isn't obvious to most, Fastly stock is surely benefiting. I wrote my last article on Fastly less than one month ago and the stock is up 97% already.
(Source: Seeking Alpha/MS Paint)
One thing I have learned is not to step in front of a speeding car, as I did with my article on Shopify. I'm still scraping myself off the windshield with that bearish call.
In this macro-environment, stock valuations are less important for an investment thesis for companies directly involved with digital transformation, at least for the immediate future. A year from now I might be telling a different story as investors will have a better picture of Total Addressable Markets (TAM) and positioning of individual companies and products.
But for now, it is safe to say that the valuation of Fastly stock could increase fairly significantly before it is on a level with other juiced stocks such as Shopify and Zoom Video. For example, it could increase in price by ~80% from where it is now before encroaching on Shopify's valuation.
Followers of my work will recognize my scatter plots. Those individuals not familiar with this valuation technique can read more about it
Digital Transformation is a once-in-a-lifetime investment opportunity fueled by the need for businesses to convert to the new digital era or risk being left behind. And the pandemic has dramatically accelerated this paradigm shift. You can take advantage of this opportunity by subscribing to the Digital Transformation marketplace service.
Please note that the price of this service will increase July 1st.
