Considering how poorly the stock has performed, the fundamentals are still good. Investors need to remember that the company is still in its growth stage and is continuing to invest heavily in sales. Right now, people are comfortable with their centralized cloud infrastructure services and many are hesitant about moving onto edge computing.
Looking at Fastly's business model, while their revenues are subscription-based, many of their clients upgrade their subscriptions because they need more services to maintain their online presence. That in of itself is a big reason to remain long Fastly.
Furthermore, in their latest earnings report, there were a couple of good metrics:
The trailing 12-month net retention rate (NRR LTM) increased to 118% in the fourth quarter from 114% in the third quarter.
Dollar-Based Net Expansion Rate (DBNER) increased to 121% in the fourth quarter from 118% in the third quarter.
Annual Revenue Retention (ARR) was 99.2% in 2021 compared to 99.3% in 2020 showcasing world-class customer retention and revenue expansion.
If you want more clarification on those metrics, read here.
I admit, the company has seen its growth slow drastically. That's mainly why the stock has fallen out of favor with growth investors. During its high-flying days, the stock was trading at nosebleed valuations. Now, the valuations are. showing that $FSLY investors can start to reap a margin of safety.
What are your thoughts on Fastly? Do you think they'll rebound sooner or later?
Reading what he wrote, I realized that almost word-for-word, I could have written the exact same memo, merely substituting "husband" for "wife," and swapping out pronouns etc. So I did :)
Everything below are his words exactly, with only substitutions for husband/wife, him/her, he/she. Any other changes are bold. It's funny but it's also 100% true!
Today on Commonstock I came across a memo by @zm1 that made me stop and think. He was writingabout constructing his wife's portfolio, and wanted to ensure he was picking businesses that she knew. It made me wonder, "am I the only one doing the same for my husband?"
My husband is a rock star--he's a super dad, prudent psychologist, and member of multiple professional leadership teams--but he doesn't know the first thing about investing. He knows I love it, so he lets me do it for him. In his portfolio, are only businesses he knows. ... I want him to feel invested in the businesses that he owns. I would argue it's hard to do that for businesses you don't really know. Another thing about my husband is that he's more risk averse than I am—another reason why knowing his investments will help during large drawdowns.
To help him feel good about my investing journey, I've come up with a portfolio of stocks I'm calling the "Happy Husband, Happy Life" Portfolio.* The goals are:
Outsized returns relative to low-cost S&P 500 index fund
Within my husband's circle of competence and within his "best vision of our future" (shout-out David Gardner, The Motley Fool)
0% that he needsto "take my word for" **(although he takes my word on everything ;)**
Not too many stocks but not too few
1 year minimum holding period
***Note: I never actually named mine - any ideas?? :)**
This is totally relatable but in my particular case, I'm actually doing this with my 7 year old son! Each morning he knows I do "Finance" and of course he sees notifications on my phone. It may be a set alert, but he was finally curious, so I took the opportunity to explain the basic of stocks to him. I then proceeded to ask him what companies he would like to invest in with his money that he has received from birthdays or Christmas. Asked him to invest in the things he loves and what he's passionate about.
Here was his initial list not knowing that all companies are not publicly traded, but I think it's hilarious and worth sharing:
Commonstock is a social network that amplifies the knowledge of the best investors, verified by actual track records for signal over noise. Community members can link their existing brokerage accounts and share their real time portfolio, performance and trades (by percent only, dollar amounts never shared). Commonstock is not a brokerage, but a social layer on top of existing brokerages helping to create more engaged and informed investors.