"Piper Sandler's disappointment centered on Fastly's core delivery business, which saw lower quarter-over-quarter volumes than most were expecting. That's the foundational layer of the platform, and softer volumes there raise questions about the trajectory of Fastly's largest revenue stream. One nuance Fish flagged: pricing remained stable. That matters because it suggests the issue is volume, not the pricing erosion that has historically pressured content delivery network (CDN) economics."
"Stocks that run too far, too fast develop expectations that even good results can't satisfy, and Fastly stock had climbed 442% over the past year heading into the earnings report. For prudent investors, this looks more like a sentiment recalibration than a broken thesis."
"Fastly operates an edge cloud platform spanning content delivery, security, and compute. In Q1 2026, Network Services (core delivery) generated $126.2 million, up 11% year over year (YoY), while Security surged 47% to $38.8 million. Fastly's total Q1 revenue reached $173.02 million, with EPS of $0.13."
Piper Sandler analyst James Fish reduced Fastly's price target to $27 from $30 while maintaining a Neutral rating following Q1 FY2026 results that met expectations rather than exceeded them. The stock declined 25% after-hours despite the company reporting record revenue, gross margin, and RPO, with total Q1 revenue reaching $173.02 million and EPS of $0.13. Management raised FY2026 guidance to $710-$725 million. Fish's concern centered on lower-than-expected quarter-over-quarter volumes in the core Network Services delivery business, though pricing remained stable, suggesting volume rather than pricing erosion drove the slowdown. The analyst views this as a sentiment recalibration rather than a broken business model, given Fastly's 210% YTD rally created unrealistic expectations.
Read at 24/7 Wall St.
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