What happened
Shares of edge cloud company Fastly (NYSE: FSLY) skyrocketed on Monday after a prominent analyst turned bullish on the company ahead of its fourth-quarter financial report. As of 12:15 p.m. ET, Fastly stock was up 26% and is now up more than 50% year to date.
So what
Bank of America analyst Tal Liani previously believed Fastly stock would underperform the market. It's common for Wall Street analysts to change their opinions, but such changes typically come in small increments. By contrast, on Monday, Liani jumped right past a neutral outlook and straight to a buy recommendation, according to The Fly -- a "double upgrade."
Liani also raised his price target for Fastly stock from $10.50 per share to $16 per share, according to Benzinga. This implies about 28% more upside for Fastly from where it trades as of this writing. And this bullish outlook has the market quite excited.
Now what
Fastly was a stock market darling earlier in the pandemic, soaring by more than 300% in 2020. But the stock has plummeted by more than 90% from its all-time high, which may lead many investors to believe the business is dying. However, this doesn't reflect reality. In 2022's third quarter, it generated record quarterly revenue of almost $109 million, and its growth rate may be accelerating.
Fastly's management forecast that the business would generate revenue of $116 million in the fourth quarter, at the high end of its guidance range. That would amount to almost 19% year-over-year growth, compared to just 13% growth in the prior-year period. Therefore, this may indeed be a company to watch when it reports Q4 financial results on Wednesday.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Fastly. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
