Should You Invest in Fastly?

PHOTO CREDIT: Fastly

OVERVIEW

Why You Should?

  1. Fastly’s services are used by large enterprise customers. It is a cloud provider for ByteDance, the parent company of TikTok, Reddit, Spotify, Pinterest, and many others. All of these companies have done well during this pandemic and so has Fastly as a result of this.
  2. Fastly is a solid long-term growth company because of its position in the cloud provider industry, something that might be worth over 1 trillion dollars in the future as companies further digitize their operations. This growth for the industry will cause the demand for Fastly’s products to also increase, which will benefit the company and cause the stock price to increase.
  3. Fastly has seen its revenues rise over the past couple of financial years due to the factors mentioned above. This will help the company build a stronger balance sheet which will help them expand in the cloud provider industry. This will benefit the company in the future. In the financial year of 2019, the company reported revenues of around 200.5 million. This metric is higher than what the company reported in the financial year of 2018 when it had revenues of around 144.5 million.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Fastly faces some tough competition from companies like Google, who operate Google Cloud, IBM, Amazon, who operate AWS, and many others. This might hurt the company’s future growth in this space.
  2. Fastly has never been profitable over its history and has actually reported wider losses over the past couple of financial years despite reporting higher revenues. The company looks for this to change in the long run but this might hurt the company’s future growth plan. In the financial year of 2019, they reported a loss of around 51.5 million, much higher than what they reported in the previous financial year when they reported a loss of around 31 million.
PHOTO CREDIT: Yahoo Finance

MY OPINION

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.