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Fastly Shares Upgraded on Developer-Platform Potential

Raymond James upgraded Fastly stock to outperform with a $100 price target.
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Fastly (FSLY) - Get Free Report shares were upgraded by analysts at Raymond James to outperform from market perform with a $100 price target.

The price target represents 18% potential upside from the stock's Friday closing price. At last check the San Francisco software-development platform's shares eased 1% to $84.19. 

Analysts at the firm are bullish after hosting a meeting with Chief Financial Officer Adriel Lares, coming away with signs that the company's trajectory is "incrementally positive," according to analyst Robert Majek. 

"Our technical dive gives us confidence that Fastly's software-defined network offers top-notch performance and that Fastly has created sustainable product differentiation with its programmable platform built for developers," Majek said.

Both those factors suggest continued share-price gains and "a durable long-term growth profile," the analyst wrote.

The firm says Fastly's shares aren't cheap after more than quadrupling year to date.

Raymond James raised its 2020 revenue estimate to $300 million from $295 million and its 2021 revenue estimate to $396 million from $376 million. 

For 2020, Raymond James now sees Fastly posting a loss of 3 cents a share, narrower than its previous estimate of a loss of a nickel. 

For 2021 the firm expects Fastly to earn 6 cents a share, up from its previous estimate of 2 cents. 

Fastly "is well-positioned to gain share in the $6 billion content-delivery market that should grow in the high-single-digit to low-teens range. In other words, Fastly currently only has 5% market share," Majek wrote.