Raymond James lowers Fastly stock price target on revised outlook

Raymond James has adjusted its price target for Fastly Inc. (NASDAQ:FSLY) to $24 from $29, while retaining an Outperform rating for the stock. This revised target follows the company's third-quarter financial results. Despite the lowered price target, Raymond James still rates Fastly's shares as Outperform. The stock is currently trading at $21.04, down nearly 18% over the past week, although it has delivered an impressive 161% return over the past year.

InvestingPro data suggests the stock is still undervalued, with a Fair Value signaling potential upside. The firm attributes this increase in traffic to AI advancements, which are driving more dynamic content delivery networks (CDNs) than those built manually by some customers. Fastly's network operates through major interconnected data centers, positioning it well to capture incremental AI and inference-related traffic, according to Raymond James.

The analysts at the firm believe Fastly has the potential for multiple expansion due to these trends. Analyst Frank Louthan IV issued the updated price target and rating. 11 other analysts have recently raised their earnings estimates for Fastly, and the company is expected to become profitable this year after posting losses over the last year.

Investors can find more detailed insights in Fastly's Pro Research Report, available on InvestingPro. Fastly offers content delivery network services and edge cloud platform solutions to enterprise customers. Despite strong third-quarter results, surpassing analyst expectations with adjusted earnings of $0.17 per share and revenue of $190.2 million, Fastly's stock declined, possibly due to investors expecting faster growth.

There were no reports of mergers or acquisitions involving Fastly, and no additional company news has been released recently.