Bull of the Day: Fastly (FSLY)

Fastly (NYSE:FSLY) NET and Fastly on the new iCloud+ Private Relay service, but he has "no sense on specific allocations" for each vendor.

Daryanani estimates that the traffic running through Private Relay could generate about $8 to $20 million in revenues in FY22 and views Private Relay as "an incremental positive for all companies involved."

Here's what I told my TAZR Trader group in the Buy Alert this week...

Portfolio is starting a very small starter position in Fastly (FSLY) under $50. We will add under $45 and $40 if those scenarios evolve. Basically, we take low risk now to get our keen attention and focus on the turn-around. And we add bigger if/when we get confirmation into their Q3 report on Nov 3.

Wall Street has grown to hate this tech growth stock after loving it too much last year. The summer outage for this streaming bandwidth provider didn't help.

I wrote about the growth implosion in my August Bear of the Day after their Q2 report. But here's what I said as I started licking my chops about the potential opportunity...

There seemed to be something of a capitulation-type move after last week's report with shares plunging to new 52-week lows under $35 on massive volume of 50 million shares, and then recovering $40 as if the worst might be discounted.

So I wouldn't blame you if you started to nibble under $40. I'm thinking about it myself with revenue growth still intact at 19% and looking to eclipse $400 million next year for a 12X forward sales multiple.

Unfortunately, we could never pull the trigger on FSLY near $40 because the stock remained trapped in the cellar of the Zacks Rank.

Well now somebody is accumulating, as Tuesday's 10.7% pop on 7.7 million shares will attest. The catalyst was news that the company was granted a US patent titled "Load balancing across origin servers."

And look how far behind Wall Street analysts are behind any recovery in this now Zacks #2 Rank...

I'm thinking the bottom is in for FSLY.

But I don't want to go all-in yet until we get analysts reversing and/or we get through the company's Q3 report and outlook.

(end of TAZR Buy Alert excerpt)

Still Doing the Volume

I perused the Fastly website this morning and they claim to be still moving small galaxies of data and content with 420 billion images optimized and delivered per month, 15 trillion log lines delivered per month, 800 billion requests per day, and greater than 95% customer satisfaction.

It's worth noting that Stripe, the next huge fintech IPO, is also a Fastly customer, according to the company website.

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With FLSY shares at $50, it is now trading about 14 times next year's sales consensus of $405 million.

We'll know in a couple of weeks if customers like Apple and TikTok have had their faith restored and the growth rate for Fastly can reemerge above 20%.

Disclosure: I own shares of FSLY for the Zacks TAZR Trader portfolio.

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