Is Fastly (FSLY) Fully Valued After Its Comcast Partnership?

Fastly (FSLY) is back in focus after Comcast announced a content and application delivery deal that puts Fastly’s edge software directly inside Comcast’s nationwide network for Xfinity customers.

The Comcast partnership comes at a time when interest in Fastly has already been building, with a 90 day share price return of 43.04% and a year to date share price return of 143.96%. This points to strong positive momentum despite a 30 day pullback of 16.94%.

Scan for other edge and AI infrastructure players showing similar momentum to Fastly by reviewing the hand-picked 60 AI infrastructure stocks.

Fastly now trades far above where it started the year, with fresh excitement around the Comcast deal already in the price. Does the current setup still offer attractive upside relative to the risks, or has the easy part of the move passed?

Most Popular Narrative: 8% Undervalued

Fastly last closed at $24.86, while the most followed valuation narrative points to a fair value of $27.00. This puts the recent Comcast excitement in the context of a thesis that leans on security and compute rather than CDN alone.

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 underpins durable multi-year revenue growth.

See why 30 investors see Fastly as 8% undervalued.

Result: Fair Value of $27.00 (UNDERVALUED)

Still, the Fastly narrative can break if CDN revenue proves too tied to one off events or if concentrated large customers pull back usage more sharply than expected.

Find out about the key risks to this Fastly narrative.

Another View on Fastly’s Valuation

That 8% undervalued fair value story for Fastly clashes with what the SWS DCF model is showing. On a future cash flow basis, the shares at $24.86 sit above an estimated value of $14.81, which points to the stock looking expensive instead. Which framework matches your own expectations for Fastly?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Fastly for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 35 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Fastly’s setup is clearly polarizing, which is exactly when independent thinking matters most. Move quickly, review the underlying drivers yourself, then weigh the 1 key reward and 3 important warning signs.

Looking for more Fastly style investment ideas?

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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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