Fastly (FSLY): Exploring the Valuation Gap After Recent Share Price Weakness

Fastly (FSLY) has quietly drifted lower over the past month, even though its longer term performance looks better. That gap between sentiment and fundamentals is what makes the stock interesting now.

See our latest analysis for Fastly.

Over the last year, Fastly’s share price has swung between renewed optimism and caution. The recent 30 day share price return of negative 9.44 percent has cooled what had been stronger 90 day momentum, while the three year total shareholder return of 20.93 percent shows that patient holders have still come out ahead despite a weaker one year total shareholder return of negative 10.24 percent.

If you like Fastly’s volatility but want more names on your radar, this is a good moment to explore high growth tech and AI stocks for other potential growth stories.

With shares still far below their five year peak, but only modestly below analyst targets, the key question now is whether Fastly is quietly undervalued or if the market is already pricing in its next leg of growth.

Most Popular Narrative: 2.4% Undervalued

Fastly's most followed narrative puts fair value slightly above the last close of $10.17, framing the stock as modestly mispriced rather than deeply discounted.

The acceleration of cloud migration and edge computing, combined with Fastly's increased product velocity (especially in Compute and adaptive observability analytics at the edge), expands the company's addressable market and supports durable multi-year revenue growth.

Read the complete narrative.

Want to see how measured revenue growth, improving margins, and a rich future earnings multiple all connect into that small discount? The full narrative explains the specific forecasts, the timing of margin inflection, and the valuation math behind this fair value estimate.

Result: Fair Value of $10.42 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained CDN pricing pressure and reliance on a concentrated group of large customers could quickly challenge assumptions about margin expansion and steady growth.

Find out about the key risks to this Fastly narrative.

Another View: Market Ratio Signals Caution

While the narrative suggests Fastly is about 2.4 percent undervalued, its price to sales ratio near 2.6 times tells a different story. That is slightly more expensive than the US IT average of 2.5 times, and only in line with its own fair ratio of 2.6 times. This hints at a limited margin of safety if growth disappoints.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Fastly Narrative

If you see the story differently or simply want to dig into the numbers yourself, you can build a personalized view in minutes using Do it your way.

A great starting point for your Fastly research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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