Yahoo Finance Fastly (NYSE:FSLY shareholders incur further losses as stock declines 12% this week, taking one-year losses to 79%
As every investor would know, you don't hit a homerun every time you swing. But it should be a priority to avoid stomach churning catastrophes, wherever possible. It must have been painful to be a Fastly, Inc. (NYSE:FSLY) shareholder over the last year, since the stock price plummeted 79% in that time. A loss like this is a stark reminder that portfolio diversification is important. Notably, shareholders had a tough run over the longer term, too, with a drop of 58% in the last three years. Shareholders have had an even rougher run lately, with the share price down 12% in the last 90 days. But this could be related to the weak market, which is down 5.6% in the same period.
Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.
View our latest analysis for Fastly
Fastly wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Fastly saw its revenue grow by 21%. That's definitely a respectable growth rate. However, it seems like the market wanted more, since the share price is down 79%. One fear might be that the company might be losing too much money and will need to raise more. We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Fastly is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Fastly in this interactive graph of future profit estimates.
A Different Perspective
The last twelve months weren't great for Fastly shares, which performed worse than the market, costing holders 79%. Meanwhile, the broader market slid about 19%, likely weighing on the stock. The three-year loss of 17% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 4 warning signs for Fastly that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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