Fastly Inc. (NYSE: FSLY) operates an edge cloud platform or content delivery network. For the past 12 months, its shares have dropped nearly 52%, and the stock is down 47% so far in 2021. A coding error in the company’s software caused about 85% of Fastly’s customers to lose service in June. That’s the bad news. The good news is that virtually all service was restored in less than an hour.
Analysts are unsure what to make of Fastly. Of 11 brokerages covering the stock, seven have assigned Hold ratings, while the other four are evenly split between Buy and Sell ratings. At a price of around $46.20, the upside potential at the median price target of $50 is 8.2%. At the high target of $60, the upside potential is about 30%.
Second-quarter revenue is forecast to rise by 1.3% sequentially to $85.98 million, compared to the year-ago total of $74.66 million. A per-share loss of $0.18 is forecast, compared with a loss per share of $0.12 in the first quarter and a profit of $0.02 a year ago. For the full fiscal year, analysts are looking for a loss per share of $0.43, compared to a loss of $0.18 a year ago, and revenue of $382.5 million, or 31.5% more year over year.
The company is not expected to post a profit in any of 2021, 2022 or 2023. Fastly’s enterprise value-to-sales multiple is 14.3 for 2021, 11.3 for 2022 and 9.5 for 2023. The company’s 52-week range is $39.47 to 136.50, and the company does not pay a dividend.
Telecom services provider Lumen Technologies Inc. (NYSE: LUMN) was known as CenturyLink until last September. For the past 12 months, shares are up 41%, including a 33% jump so far in 2021. The company’s rich dividend is attractive to hedge funds and could attract some attention from retail investors who might be looking to offset some riskier plays.
Analysts are relatively cool to the stock. Of 13 brokerages covering Lumen, six have given the stock a Sell or Strong Sell rating, and another five rate the shares as a Hold. At a price of around $12.50, the stock has outrun its median price target of $12.00. At the high target of $18, the upside potential on the stock is about 46%.
Second-quarter revenue is expected to drop sequentially by 0.8% and year over year by 3.8% to $4.99 million. EPS are forecast at $0.41, down 7.4% sequentially and down a penny year over year. For the full year, EPS are forecast to dip by 1.7% to $1.64 and revenue is expected to fall by 3.6% to $19.96 billion.
Lumen stock trades at 7.6 times expected 2021 EPS and 8.9 times estimated earnings for both 2022 and 2023. The stock’s 52-week range is $8.51 to $16.60. Lumen pays an annual dividend of $1.00 (yield of 8.02%).
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