DA Davidson lowers Fastly stock price target on valuation concerns

DA Davidson has reduced its price target for Fastly Inc. (NYSE:FSLY) stock to $23 from $26, while keeping a Neutral rating. The company's stock is currently trading at $26.08, which is above the new target. InvestingPro analysis suggests that Fastly may be overvalued at its current level, based on its Fair Value assessment. Fastly's management at its recent Investor Day in New York City emphasized their focus on delivering a unified platform and driving broader platform adoption across product suites, particularly in areas beyond content delivery network services.

Security adoption, particularly for Bot Management and DDoS products, has been robust, with growth rates exceeding 100% year-over-year. Fastly has set new 2029 targets, which were generally impressive and exceeded consensus expectations. The slight deceleration in guidance compared to 2026 was likely underwhelming for bulls who had unrealistic expectations for AI integration.

Despite delivering a remarkable 157% return year-to-date, 11 analysts have revised their earnings estimates upwards for the upcoming period. DA Davidson highlighted valuation concerns and high AI expectations as the reasons for maintaining its Neutral rating, raising the price target to $23 from $21. Fastly Inc. has also been the subject of recent updates from financial analysts and company events, with consistent revenue growth and ambitious long-term goals.