BofA double-downgraded Fastly, Inc. (NYSE:FSLY) to Underperform from Buy, slashing the price target for the stock to $8 from $18 per share in a note Thursday.
The investment bank told investors there is a risk of further guidance cuts. Fastly shares tumbled more than 34% in today's session after the company reported earnings following Wednesday's close, with investors reacting to its weaker-than-expected guidance.
"We downgrade Fastly from Buy to Underperform as the near-term risks outweigh the longer-term positive catalysts," said BofA. "Decelerating growth in Fastly's largest customers, share loss in delivery, and limited visibility in 2H cause us to question a rebound in 2024."
Bank of America's analysts added: "While we continue to like Fastly's positioning in the edge compute market, we see it as a 2025 opportunity instead of a near-term growth driver."
They concluded that the risk factors listed above could prompt further downward revisions to guidance "which may keep a lid on the stock."