Fastly, Inc. (NASDAQ: FSLY)

Sector: Technology Industry: Software - Application CIK: 0001517413
Market Cap 1.35 Bn
P/B 1.44
P/E -9.70
P/S 2.28
ROIC (Qtr) -10.44
Div Yield % 0.00
Rev 1y % (Qtr) 15.32
Total Debt (Qtr) 408.91 Mn
Debt/Equity (Qtr) 0.44

About

Fastly, Inc. (FSLY) is a prominent player in the edge cloud services industry, known for its programmable edge platform that enables customers to deliver fast, safe, and engaging digital experiences. The company's main business activities are centered around this platform, which offers a suite of products and services designed to accelerate and optimize the delivery of web and application traffic. Fastly's edge cloud platform is built to support modern digital experiences, featuring powerful points of presence (POPs), a software-defined network,...

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Price action

Investment thesis

Bull case

  • Short-term investments of 229.78M provide solid 2.16x coverage of other current liabilities 106.18M, indicating strong liquidity.
  • Robust tangible asset base of 772.19M provides 5.12x coverage of working capital 150.87M, indicating strong operational backing.
  • Tangible assets of 772.19M provide robust 7.27x coverage of other current liabilities 106.18M, indicating strong asset backing.
  • Cash reserves of 113.13M provide solid 14.65x coverage of other non-current liabilities 7.72M, indicating strong liquidity.
  • Operating cash flow of 77.23M provides strong 89.49x coverage of operating expenses 863000, showing operational efficiency.

Bear case

  • Operating cash flow of 77.23M barely covers its investment activities of (178.27M), with a coverage ratio of -0.43, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (178.27M) provide weak support for R&D spending of 153.81M, which is -1.16x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 77.23M shows concerning coverage of stock compensation expenses of 109.99M, with a 0.70 ratio indicating potential earnings quality issues.
  • Operating earnings of (125.38M) show weak coverage of depreciation charges of 101.47M, with a -1.24 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 34.19M represents just -3.22x of debt issuance (10.61M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Geographical Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.14 2.65
EV to Cash from Ops. EV/CFO 21.71 13.37
EV to Debt EV to Debt 4.10 57.69
EV to EBIT EV/EBIT -13.37 19.12
EV to EBITDA EV/EBITDA -45.59 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF 49.03 14.69
EV to Market Cap EV to Market Cap 1.24 -92.28
EV to Revenue EV/Rev 2.83 4.60
Price to Book Value [P/B] P/B 1.44 4.26
Price to Earnings [P/E] P/E -9.70 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) -11.69 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -22.23 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -47.99 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 12.43 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 54.30 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) 13.71 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) 7.76 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 11.11 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 208.86 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.66 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.40 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.34 3.75
Current Ratio Curr Ratio (Qtr) 1.46 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.44 0.17
Interest Cover Ratio Int Coverage (Qtr) -11.69 -52.32
Times Interest Earned Times Interest Earned (Qtr) -11.69 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -4.00 -100.06
EBIT Margin % EBIT Margin % (Qtr) -21.18 -164.24
EBT Margin % EBT Margin % (Qtr) -22.99 -116.94
Gross Margin % Gross Margin % (Qtr) 55.00 58.20
Net Profit Margin % Net Margin % (Qtr) -23.50 -121.65