Shares of Fastly (NYSE:FSLY) are tumbling this week after the company reported second-quarter results on Aug. 4 that missed some analysts’ consensus estimates. Investors also reacted to several analysts lowering the stock’s price target. The tech stock is down 16.5% so far this week.
Investors were disappointed that the company’s second-quarter revenue of $85 million missed analysts’ consensus estimate of $85.7 million. Additionally, management issued third-quarter guidance that was below Wall Street’s estimates.
Management said that the company’s third-quarter loss per share will be about $0.19, far worse than analysts’ consensus estimate of a loss of $0.09.
The company experienced a short (but major) outage of its services in early June, and management said that some customers, including one of its largest ones, have not returned to the company’s platform since then.
“The outage and these delays will have an impact on our Q3 and full year outlook,” Fastly CEO Joshua Bixby said in a press release.
Investors also reacted to the fact that several analysts downgraded the edge-computing company following its earnings release.
Analysts from Craig-Hallum, D.A. Davidson, Citigroup, and Piper Sandler all lowered their price targets for Fastly’s stock, and several of them downgraded its rating as well.
The combination of quarterly results with bearish outlooks from analysts caused Fastly’s share price to plunge.
With the company’s recent results, it’s not a surprise that investors are sending Fastly’s stock tumbling this week. But management said that it expects the traffic it lost on its network in the second quarter will come back later in 2021. Long-term investors might want to wait and see if that optimism pans out over the next few quarters.
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