Fastly Inc . (NYSE:FSLY) Chief Financial Officer Ronald W. Kisling has sold 12,000 shares of Class A Common Stock on July 1st, according to a recent SEC filing. These transactions were made at weighted average prices ranging from $7.20 to $7.38, with the total sale amounting to over $87,000.
The sale was conducted under a Rule 10b5-1 trading plan, which Kisling had adopted on November 20, 2023. This type of plan allows company insiders to set up a predetermined schedule for buying or selling stocks at a time when they are not in possession of nonpublic information. It is designed to prevent insider trading allegations by allowing these transactions to occur irrespective of what material company information they might be privy to at the time.
The shares were sold indirectly by the Ronald Kisling Living Trust, indicating a change from direct to indirect form of beneficial ownership. The SEC filing specifies that the shares were sold in multiple transactions, and Kisling has agreed to provide full information regarding the number of shares sold at each separate price within the given range upon request.
Following the sale, Kisling still holds a substantial stake in the company, with 593,506 shares of Fastly's Class A Common Stock remaining in his possession. Fastly, headquartered in San Francisco, California, specializes in cloud computing services and is known for its edge computing platform.
Investors often keep a close eye on insider transactions as they can provide insights into an executive’s view of the company's stock value and future performance. However, it is important to note that these transactions do not necessarily indicate a change in company fundamentals or future direction.
In other recent news, Fastly, Inc. reported a 14% year-over-year revenue increase in Q1 2024, reaching $133.5 million, and saw a rise in gross margin to 58.8%. However, the company provided a lower-than-expected guidance for Q2 and the full year of 2024, attributing this to reduced revenue from some of their largest customers. In an executive reshuffle, Fastly appointed Scott R. Lovett as its Chief Revenue Officer, a move aimed at enhancing long-term growth and customer acquisition efforts.
On the other hand, Fastly has been met with analyst downgrades following its cautious outlook. RBC Capital reduced its price target on Fastly to $9 from $18, maintaining a Sector Perform rating. Similarly, DA Davidson downgraded Fastly from Buy to Neutral, slashing the price target to $8.50 from $24.
In other developments, Fastly's Annual Meeting of Stockholders resulted in the reelection of three directors and approval of executive compensation. The stockholders also ratified the appointment of Deloitte & Touche LLP as Fastly's independent registered public accounting firm for the fiscal year ending December 31, 2024. These are among the latest developments in the company's ongoing efforts to navigate its business landscape.
InvestingPro Insights
Amidst the news of Fastly Inc.'s (NYSE:FSLY) CFO disposing of shares, investors are assessing the company's financial health and future prospects. The latest data from InvestingPro shows a market capitalization of approximately $1.01 billion, reflecting the size and scale of the company within the cloud computing industry. Notably, Fastly's revenue has shown growth, with a 16.53% increase over the last twelve months as of Q1 2024, signaling a continuing expansion despite broader market challenges.
However, the insights from InvestingPro highlight some concerns. Analysts have adjusted their earnings expectations downwards for the upcoming period, and they do not expect the company to be profitable this year. This sentiment is mirrored in the company's negative price-to-earnings (P/E) ratios, with the most recent adjusted P/E ratio reported at -5.9. Additionally, Fastly's stock has experienced a significant price drop over the past year, with a 53.37% decline in the one-year price total return as of mid-2024. The company's stock price, as of the previous close, stood at $7.17.
Despite these challenges, InvestingPro Tips suggest that Fastly operates with a moderate level of debt and has sufficient liquid assets to cover its short-term obligations. This may provide some reassurance to investors concerned about the company's immediate financial stability. Moreover, Fastly does not pay a dividend, which is typical for growth-oriented tech companies that prefer to reinvest earnings back into the business.
For investors seeking a deeper dive into Fastly's financials and stock performance, there are additional InvestingPro Tips available. To explore these further and to leverage advanced analytics, consider subscribing to InvestingPro using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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