Credit Suisse analyst Brad Zelnick maintains the Outperform rating on Fastly and cuts the target price from $ 110 to $ 100.
Raymond James analyst Robert Magic maintains an Outperform rating on Fastly.
More questions than answers: Zelnick believes Fastley has left investors and analysts “more questions than answers.”
He quickly said his biggest customer, TikTok, delivered less than expected revenue in directing. The company also revealed that it used fewer other customers in the quarter.
“Who are the few clients who are disappointed?” Zelnik asked on a note. He also wants to know how the decline in revenue and impact from TikTok will affect profitability upon releasing the full results.
Majek believes that asking other customers is “more anxious” that TikTok’s scores will drop.
What’s Next: Magic believes that “the stock will remain under pressure until we have more clarity on these elements,” but remains bullish for the company.
“We have not lost any confidence in Fastly’s performance and product differentiation,” he wrote in a note.
Zelnick would like to hear more details about ByteDance / TikTok’s relationship with Fastly. In the second quarter, ByteDance accounted for 13% of Fastly’s revenue.
Zelnick wonders if ByteDance is “proactively looking (edited) for an international provider.”
Take benzenga: Both analysts have a lot of questions about Fastly, but they don’t lower the stock’s rating.
TikTok is the largest customer but made up 13% in the second quarter. Stocks will be pressured ahead of October 28, the day the quick release of the official third-quarter earnings will be released.
Shares are up over 500% in 2020, but falling today could be an overreaction.
Fastly shares closed 27% lower at $ 89.37.
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