Fastly Stock Gets RS Rating Lift To 87

Fastly, Inc. (NYSE: FSLY), a leading edge cloud platform provider, has seen a significant boost in its RS rating, climbing to 87. This upgrade reflects the company's strong financial performance and positive market sentiment. In this article, we will delve into the factors contributing to Fastly's rating upgrade and explore the implications for investors.



Revenue and Profit Growth

Fastly's revenue and profit growth have been instrumental in driving its RS rating upgrade. In the last 12 months, the company's revenue grew by 10.94% to $540.87 million, while its gross profit increased by 17% to $296.65 million. Despite reporting a net loss of -$148.56 million, Fastly's operating margin improved by 22% YoY and 11% QoQ, indicating a positive trend in its profitability.



Gross Margin and Operating Margin Improvements

Fastly's gross margin and operating margin improvements have also played a crucial role in its rating upgrade. The company's gross margin increased by 17% YoY and 3% QoQ, while its operating margin grew by 22% YoY and 11% QoQ. These improvements signal enhanced operational efficiency and profitability, which likely factored into the stock's rating upgrade.

Analyst Ratings and Price Targets

Fastly's revenue and profit growth rates have significantly influenced analysts' ratings and price targets for the stock. In the past year, Fastly's revenue has grown by an average of 10.94% YoY, while its profit has seen a 22.12% increase. This strong financial performance has led analysts to upgrade their ratings and price targets. For instance, Piper Sandler raised its price target from $6 to $8, expressing cautious optimism despite keeping a Neutral rating. Additionally, the average price target for Fastly stock has increased to $8.61, indicating analysts' confidence in the company's growth prospects.



Debt Levels and Financial Leverage

Fastly's debt levels have contracted by 27% YoY and by 2% from the previous quarter, indicating improved financial health. This reduction in debt has likely contributed to analysts' more positive outlook on the stock, as reflected in the RS rating lift to 87. A lower debt burden can signal better risk management and increased financial flexibility, making the company more attractive to investors. Additionally, the decline in debt may have influenced analysts' views on the company's ability to generate cash flows and maintain profitability, further enhancing its investment potential.

In conclusion, Fastly's RS rating upgrade to 87 reflects the company's strong financial performance, particularly its revenue and profit growth, as well as improvements in gross margin and operating margin. Analysts' positive outlook on the stock, driven by these factors, has led to upgrades in ratings and price targets. As Fastly continues to demonstrate its financial prowess, investors may want to consider the company as a potential addition to their portfolios. However, it is essential to conduct thorough research and consult with a financial advisor before making any investment decisions.