It's Time to Admit That Fastly Stock Is Drastically Overvalued
Shares of content delivery network provider Fastly (NYSE: FSLY) have been getting hammered ever since the company cut its guidance in October due to lower revenue from its largest customer TikTok and lower usage from some of its other customers. The stock has been trending downward ever since that announcement, and its third-quarter earnings report did nothing to stem the tide.
Fastly stock has now been cut in half since peaking prior to the guidance cut. Revenue grew by 42% in the third quarter, which is great in a vacuum. But relative to Fastly's extreme valuation before the guidance cut, it wasn't nearly enough.
For those thinking about "buying the dip," think again. Fastly's revenue growth is set to slow dramatically despite a worsening pandemic ostensibly providing benefits to cloud-based companies. The premise on which Fastly rallied this year no longer appears sound.
Source Fool.com
