Entering text into the input field will update the search result below

Fastly: Earnings Results, Lowers Its Guidance, Stock Sells Off

Aug. 05, 2021 3:59 AM ETFastly, Inc. (FSLY) Stock30 Comments


  • Fastly revises lower its guidance.
  • Discussing Fastly's Net Retention Rate trajectory. Why this matters, and how investors should think about it.
  • Even after its sell-off, this stock is still expensive at 11x sales. Particularly, compared with other stocks that are growing faster and are valued cheaper.
  • I do much more than just articles at Deep Value Returns: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

TechCrunch Disrupt SF 2014 - Day 3
Steve Jennings/Getty Images Entertainment

Investment Thesis

Fastly (NYSE:FSLY) comes out with guidance that has taken investors, including me, by surprise. Not only is its revenue growth rate substantially lower than expectations, but its customers are also now spending less on its platform.

Strong Investment Potential

My Marketplace highlights a portfolio of undervalued investment opportunities - stocks with rapid growth potential, driven by top quality management, while these stocks are cheaply valued.

I follow countless companies and select for you the most attractive investments. I do all the work of picking the most attractive stocks.

Investing Made EASY

As an experienced professional, I highlight the best stocks to grow your savings: stocks that deliver strong gains.

  • Honest and reliable service.
  • Source of investing ideas.
  • Very simply explained stock picks. Helping you get the most out of investing.
  • Vibrant investment community in Chat Room.
  • Long track record.

This article was written by

Michael Wiggins De Oliveira is an energy specialist whose primary focus is capitalizing on “the Great Energy Transition” - the confluence of decarbonization, digitalization with AI, and deglobalization - to achieve greater investment returns. Through his 9+ years analyzing countless companies, Michael has accumulated outstanding professional experience in the energy sector and a following of over 40K on Seeking Alpha.

Michael is the leader of the investing group Deep Value Returns. Features of the group include: Insights through his concentrated portfolio of value stocks, timely updates on stock picks, a weekly webinar for live advice, and "hand-holding" as-needed for new and experienced investors alike. Deep Value Returns also has an active, vibrant, and kind community easily accessible via chat. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (30)

Wow he deleted my comment regarding his bad track record especially on this stock in the last 6 months. Great way to handle critisism Michael...
Down 22% now premarket. Wow. I remember when this stock was over $100. Shitt. Burn. Good thing I got out around 80s.
Value Digger profile picture
Among other negatives, FSLY passed into POSITIVE net debt in Q2 2021 from a net cash position in Q1 2021, as forecast in my past comments.

Specifically, FSLY's debt and finance lease liabilities (which is considered debt) exceed cash & cash equivalents & marketable securities.
@Value Digger Their convertible notes have zero interest rate.
Value Digger profile picture
@Gerry_Che This does not change absolutely anything.

As noted above, FSLY's debt and finance lease liabilities (which is considered debt) exceed cash & cash equivalents & marketable securities.

Therefore, FSLY passed into POSITIVE net debt in Q2 2021 from a net cash position in Q1 2021, as forecast in my past comments.
KP2021 profile picture
@Value Digger so, in your opinion, what will be the material effect of the positive net debt position for the short and long term of the company?
This Author @Michael Wiggins De Oliveira is too funny :D ! He called just few months ago fastly was cheap when it was really expensive, and now for him it is expensive.
By the way one should read the shareholder letter, listen the conference call and analyze the reason behind the panic selloff.
at the end of the day fastly provides the quality products which are used by high quality growth companies.

in the short term you might lose but its huge opportunity for the long term patient investors.

this story is very much similar to Twilio before covid.

I went though same pain with Twilio, square, tesla, Align etc and still holding them. at the end of the day innovation & quality products always wins.
@Prashanthan Completely agree
Michael Wiggins De Oliveira profile picture

''By the way one should read the shareholder letter, listen the conference call and analyze the reason behind the panic selloff.''

@Prashanthan what happened to Twilio by late 2017 to early 2018?
AlexMVA profile picture
Author : you were bullish when the price was 110$ and found it fairly valued? What caused this drastic change of your assesment?
Michael Wiggins De Oliveira profile picture

Hey Alex,

I wrote about it just 5 weeks ago:


Just 5 weeks I want into at length why I felt that the stock is expensive.

I stated then,

'' it will be far from easy to get attractive returns here.''

''However, I declare that even now at a $6 billion market cap, investors are having to take a very bullish view on Fastly's prospects and to take a leap of faith here. All in all, I suspect that there are slightly more compelling investments elsewhere.''

The stock was then $55.

All the best. Good luck.
Thanks for the article. I still wondering wether fastly will ever be profitable. They have a lot competition with scale, technological and integration advantages. With a NRR under 100% (terrible for a unprofitable very expensive growth company) and a margin of negative 30% - 40% I am highly skeptical. The best case would be a buy out by Csco.
@AlphaSierra It depends on if you believe the NRR is bad due to a one-time event and they can restore their past NRR or you believe it will have bad influences forever.
So, what is the main competative coperation against fsly? If China issue falls, fastly will go high again.
Thanks for this update @Michael Wiggins De Oliveira Possible to have a similar analysis on Alteryx and Sprout please?
Michael Wiggins De Oliveira profile picture

Thanks for your comment.

Truthfully, I'm absolutely drowning in work right now. And I'm only covering the stocks that I'm passionate about.

I used to be invested in FSLY, so I still follow it.

Good luck, my friend.
I think the problem is that you only based your investment decisions on the numbers. However, bad numbers on a quarter or two do not tell you too much about a young and growing company. Bad numbers for this quarter, yes. But they have best of breed technology and their problem seems to be temporary. I think this company is a good buy at these prices.
KP2021 profile picture
Did you listen to the earnings call before writing this? You make it sound like it's going to zero. Come on now. Do you really think the cdn with the fastest performance will be a bad investment in the digital revolution?

I agree that people should wait for the knife to land first before trying to pick it up, but after market prices are on the cheap side when looking 2-5 years out.

The NRR directly compared June 2020 (peak covid) with June 2021 (after outage), hence the lower then 100% number.
I have a difficult decision to make, either sell everything although I paid 75$ for each share and take a huge loss or hope that it might recover next year. Damn it.
Michael Wiggins De Oliveira profile picture
@Steffen J.

Hey Steffen,

It makes absolutely no difference the price you paid for your stock.

Don't price anchor your investment.

Good luck.
Fastly: Cheaply Valued, Again
Michael Wiggins De Oliveira profile picture


This is what I wrote in May and you and I discussed that I changed my mind as the facts changed. And you didn't like that I change my mind ''too often'' -- your words.


And again, last month, we had the same discussion.


And, listen, Heung, don't worry about FSLY. I've made countless mistakes too and lost my capital many times, and I lived to fight another day. And I know you will too.

Best of luck my friend. Happy investing.
My mistake . You called fsly cheap at $111
Founder brought at 40$ On last plummet . And fsly surged back to 60$ before cascading . That was one of the support line . In time of emotion , people don’t buy at bottom . There is no right valuation here . Now everything is emotional . The best advice is to put it down for awhile . I think any decision now is sentimental . Michael not long ago you said it was a buy when fsly was 130$ .
Be careful to commit the same fault . I read Joshua Bixby talks for 3 quarters . He is aggressive . He is young . For sure he needs a poise cfo
Michael Wiggins De Oliveira profile picture

'' Now everything is emotional ''

This I absolutely agree. Good luck, my friend.
As they grow, their losses increase.. Now they don’t plan to grow that aggressively… maybe they’ll price themselves outside the market, or the service is not living up to expectations . Not so worried about Akamai at the end.
Michael Wiggins De Oliveira profile picture

Fair comments. Thanks for putting them down, Brankow.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About FSLY

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on FSLY

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.