CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Why the Fastly share price fell 27% on Thursday: 60 second wrap

‘The current global environment has in some ways fueled our business, but has also created areas of uncertainty’ – Fastly CEO, Joshua Bixby.

Edge cloud platform company Fastly, Inc (NYSE: FSLY) saw its share price finish out Thursday’s session 27% lower after the company said it expected its Q3 revenues to come in lower than previously guided.

Understanding the sell-off in under 60 seconds

Here are the key things that investors and traders need to understand about Fastly’s revised guidance:

  • On Wednesday, after the market close, Fastly lowered its third quarter total revenue guidance to between $70.0m to $71.0m. Previously the company had guided for total Q3 revenues of between $73.5m to $75.5m.
  • Management cited reduced usage from its largest customer (ByteDance’s TikTok) as a key driver in this reduction in expected Q3 revenue.
  • In addition to that, management noted that during the back-half of Q3 some of the company’s other customers recorded lower usage than previously forecast.
  • Expectations around Fastly – and SAAS stocks in general – have reached fever pitch in recent times. Even after yesterday’s 27% decline, Fastly continues to trade at ~35x sales – well above the market average.

Looking forward, the company is set to report its complete third quarter earnings report on Wednesday, October 28, 2020.

Fastly last traded at $89.70 per share. YTD the stock is up 317%.

Want to trade Fastly and other SAAS stocks, long or short?

Create an IG trading account or log in to your existing account to get started now.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get commission from just 0.08% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.