Why Fastly Stock Plunged After the Company Released Earnings Guidance
In a downward spiral for the last few months, Fastly's (NYSE: FSLY) stock can't seem to catch a break. Despite the raised full-year revenue outlook on strong anticipated demand for the company's content delivery network (CDN) services in the second half of the year, the stock price plunged by roughly 27% following the earnings release on May 5. It's now trading more than 60% below its year-ago all-time high.
Here's why the market's enthusiasm about Fastly's high-growth story appears to be fading away.
With its consumption-based model, Fastly profited from the boost in usage of online services generated by coronavirus-induced lockdown measures over the last several quarters. And with some of these new habits becoming permanent, management anticipates strong revenue growth this year. As a result, last week it raised its full-year revenue outlook by $5 million to a range of $380 million to $390 million, which corresponds to a 32% year-over-year growth at the midpoint.
Source Fool.com
