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.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% 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. Prices are indicative only. All shares prices are delayed by at least 15 mins.


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

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

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.