Critical Contrast: Fastly (FSLY) and The Competition

Fastly (NASDAQ:FSLY) is one of 271 publicly-traded companies in the “IT Services” industry, but how does it weigh in compared to its competitors? We will compare Fastly to similar companies based on the strength of its analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Earnings and Valuation

This table compares Fastly and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Fastly	$624.02 million	-$121.68 million	-39.95
Fastly Competitors	$3.24 billion	$227.67 million	-26.73

Fastly’s competitors have higher revenue and earnings than Fastly. Fastly is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Fastly has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500. Comparatively, Fastly’s competitors have a beta of 2.16, meaning that their average share price is 116% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Fastly and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fastly	2	5	7	1	2.47
Fastly Competitors	1993	5657	9482	342	2.47

Fastly presently has a consensus price target of $26.00, indicating a potential upside of 62.70%. As a group, “IT Services” companies have a potential upside of 26.79%. Given Fastly’s higher probable upside, analysts clearly believe Fastly is more favorable than its competitors.

Insider & Institutional Ownership

79.7% of Fastly shares are owned by institutional investors. Comparatively, 36.4% of shares of all “IT Services” companies are owned by institutional investors. 4.2% of Fastly shares are owned by company insiders. Comparatively, 20.4% of shares of all “IT Services” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Fastly and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fastly	-8.74%	-4.57%	-2.93%
Fastly Competitors	-191.32%	-32.18%	-8.63%

Fastly Company Profile

Fastly, Inc. operates an edge cloud platform for processing, serving, and securing its customer's applications in the United States, the Asia Pacific, Europe, and internationally. The edge cloud is a category of Infrastructure as a Service that enables developers to build, secure, and deliver digital experiences at the edge of the internet. The company offers network services to speed up and optimize the delivery of web and application traffic; device detection and geolocation; content delivery network, such as dynamic site acceleration, origin shield, instant purge, surrogate keys, programmatic control, content compression, reliability features, fanout, domainr, privacy, and modern protocols and performance services; and video/ streaming solutions and services, including live streaming, video on demand, and media shield. It also provides security solutions, such as DDoS protection, next-gen WAF, bot management, API and ATO protection, advanced rate limiting, and compliance services; load balancing; image optimization; transport layer security (TLS), platform TLS, and certainly; and origin connect. It serves customers operating in digital publishing, media and entertainment, technology, online education, travel and hospitality, and financial services industries. The company was formerly known as SkyCache, Inc. and changed its name to Fastly, Inc. in May 2012. Fastly, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.