Why Fastly Stock Plunged 14% on Tuesday
After a spirited round of "dueling analysts," shares of Fastly (NASDAQ: FSLY) closed 14% lower on Tuesday. One analyst firm issued a bullish report on the stock and another posted a bearish review; many investors agreed with the negative analysis.
Let's start on the bearish side of the fence. Craig-Hallum analyst Jeff Van Rhee downgraded Fastly's stock from "buy" to "hold," with a price target of $24 per share. The stock closed Monday's trading at $24.37, roughly in line with the firm's value projection. Van Rhee noted that Fastly's stock has risen sharply from last September, when the now-defunct "buy" rating was issued. At current prices, the firm doesn't expect much further upside as Fastly wrestles soaring hardware costs.
At the same time, Evercore analyst Peter Levine started Fastly coverage at "outperform" with a $32 price target. In Levine's view, massive demand for content delivery and edge computing services outweighs Fastly's lofty valuation. The company's combo of AI computing at the network edge and robust security tools makes Fastly a compelling investment idea in Evercore's analysis.
Source Fool.com
