Fastly stock surges after Bank of America upgrades shares
Yahoo Finance Live anchors Julie Hyman and Brian Sozzi discuss the rise in stock for Fastly following a Bank of America analyst’s upgrade.
Video Transcript
BRIAN SOZZI: Also excited about this one, shares of Fastly surging to the green. That's what usually happens when they surge after Bank of America Securities upgrades the stock to a buy from under-perform. The price target for Fastly also getting boosted from $10.50 to $16, suggesting 27% upside from current levels. Good call, interesting company-- B of A saying investors should get in on the ground floor, calling out the potential for revenue acceleration, more diversified products from this company due to a new CEO who came over from Cisco in September and potential margin expansion as the company undertakes all of these things. This is a pretty good note.
JULIE HYMAN: Yeah, and to get the two-step upgrade, which is relatively rare here, the stock up and-- are we going to take [INAUDIBLE] on camera? [INAUDIBLE] his little--
BRIAN SOZZI: Take that. When you get the double upgrade, you get the boom from me. You get the boom. There we go, the boom. There we go. That's the double upgrade.
JULIE HYMAN: Yes, that's the double upgrade symbol, apparently. A couple other things to note when it comes to Fastly, the company is reporting its results on Wednesday after the close of trading. It's down 65% over the past year. It's up about 20% year-to-date here-- so definitely, some anticipation, some optimism. By the way, the new CEO's name is Todd Nightingale--
BRIAN SOZZI: Oh, I love that.
JULIE HYMAN: --which is--
BRIAN SOZZI: I love that. That's great.
JULIE HYMAN: That was the guy--
BRIAN SOZZI: How do you not bet on someone named Todd Nightingale? I mean, this is great.
JULIE HYMAN: I guess you do, according to the people over at Bank of America. Here, too, by the way, cost reduction is part of the story, as it is for so many companies right now. And so that's something that the note is calling out as well, slower infrastructure build-out. The implementation of capacity forecasts should give a boost to gross margin according to Tal Liani and the team over there at Bank of America.
BRIAN SOZZI: There we go. I love seeing upgrades before a company reports earnings. As an analyst, as a former analyst, I just love seeing those things. You're putting your stake in the ground. Chances are you have some really good research and insight into that particular company. And you're willing to make a call. I dig it. Good for them.
