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I think it's time to buy the dip on $FSLY
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.
$FSLY is an edge computing platform that relies a lot on developers for adding utility to it. So far, the company has a couple of well-known clients like $SHOP $CRM $SPOT $NEWR $MSFT $ALK $BKNG $W $LYV and more.
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?
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