Fastly Stock Nears Buy Point As Online Services Seek Speed – Investor's Business Daily

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Fastly Inc CL A

Fastly Inc CL A


$19.92 19.84% 137%

IBD Stock Analysis

  • Shares have been in consolidation for 10 weeks with a buy point of 117.89
  • Steep run-up on Wednesday could lead to pullback; buyers should beware
  • Stock has best-possible Relative Strength Rating of 99; RS line at new high

Composite Rating

Industry Group Ranking

Emerging Pattern


* Not real-time data. All data shown was captured at 1:43PM EDT on 10/07/2020.

Fastly (FSLY) is the IBD Stock Of The Day as the content delivery network service has seen its shares surge amid strong demand for its technology to speed up websites and apps. Fastly stock rocketed above a buy point Wednesday.


On the stock market today, Fastly stock soared 19.8% to close at 120.33. The stock had been consolidating for the past 10 weeks with a buy point of 117.89, according to IBD MarketSmith charts.

However, its run-up this week has been so steep that there’s a risk of a pullback now that Fastly stock has hit its buy point. IBD trading guidelines recommend starting with a small position if a stock breaks out under these circumstances.

Fastly stock has been on a tear since Sept. 21, when it jumped over its 50-day moving average line.

A Top Performer In Leading Industry Group

Fastly ranks No. 17 out of 81 stocks in IBD’s Computer Software-Enterprise industry group, according to the IBD Stock Checkup tool. That group currently ranks ninth out of 197 industry groups tracked by IBD. Choosing highly rated stocks from leading industry groups in a confirmed stock market uptrend generally increases your chances of making profits in growth stocks.

Fastly stock has a robust IBD Composite Rating of 97 out of 99. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.

Also, Fastly stock has a best-possible IBD Relative Strength Rating of 99. That puts it in the top 1% of stocks in terms of performance over the past 12 months.

TikTok Called ‘Major Risk’ For Fastly Stock

The San Francisco-based company posted a surprise profit in its second-quarter results on Aug. 5. Fastly earned an adjusted 2 cents a share, vs. a year-earlier loss of 16 cents a share, for the quarter ended June 30. Sales rose 62% year over year to $74.7 million.

“As the global pandemic continues to accelerate the need for businesses to focus on digital transformation, the demand for a modern, fast, and secure edge platform like ours continues to increase,” Fastly Chief Executive Joshua Bixby said in a news release.

Fastly also disclosed that controversial Chinese mobile video app TikTok is its biggest customer, accounting for 12% of its revenue.

Oppenheimer analyst Timothy Horan downgraded Fastly stock to perform, or neutral, on the news. The possibility of a TikTok ban in the U.S. over security concerns is a “major risk” for Fastly.

In addition to TikTok, other Fastly customers include Shopify (SHOP), Spotify (SPOT) and Ticketmaster.

Fastly Stock IPO Held In May 2019

On Oct. 1, Fastly completed its acquisition of Signal Sciences for $775 million in cash and stock. Signal Sciences brings web application security solutions to Fastly.

Fastly stock went public in May 2019 with shares priced at 16.

To find the best stocks to buy or watch, check out IBD Stock Lists. Also consult IBD’s LeaderboardMarketSmith and SwingTrader platforms.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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