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Fastly (FSLY) to Report Q2 Earnings: What's in the Cards?

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Fastly (FSLY - Free Report) is set to release second-quarter 2020 results on Aug 5.

For the quarter, the company expects to report between loss of 2 cents per share and break even. The Zacks Consensus Estimate is currently pegged at a loss of 1 cent per share, which has widened by a penny over the past 30 days. The company had reported a loss of 16 cents per share in the year-ago quarter.

Moreover, the company expects revenues between $70 million and $72 million. The consensus mark for the top line is currently pegged at $71.7 million, implying 55.2% growth from the figure reported in the year-ago quarter.

Markedly, Fastly’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one, the average being 20.8%.

Fastly, Inc. Price and EPS Surprise

Let’s see how things shaped up prior to this announcement.

Factors to Watch

Fastly’s second-quarter results are expected to have benefited from solid growth in Internet traffic due to coronavirus-led lockdowns and shelter-in-place guidelines, much similar to Akamai (AKAM - Free Report) , its closest peer.

Markedly, Akamai’s top line grew 12.7% year over year (up 14% after adjusting for forex) to $794.7 million, driven by high traffic levels as more enterprises moved their operations online due to the coronavirus outbreak. Peak traffic on the Akamai platform exceeded 100 terabits per second on a daily basis in the second quarter.

Fastly is also expected to have benefited from this trend. Increased level of media consumption and e-commerce activity is expected to have spurred volumes.

Moreover, growing demand for edge computing is anticipated to have provided a boost to the company’s top-line growth.

Notably, dollar-based Net Expansion Rate and Net Retention Rate were 133% and 130%, respectively, in the last-reported quarter. The momentum in customer addition and retention is expected to have continued in the to-be-reported quarter.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Fastly has an Earnings ESP of +27.27% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a couple of companies besides Fastly worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

AMETEK (AME - Free Report) has an Earnings ESP of +3.96% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alteryx has an Earnings ESP of +16.92% and a Zacks Rank #3.

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Akamai Technologies, Inc. (AKAM) - free report >>

AMETEK, Inc. (AME) - free report >>

Fastly, Inc. (FSLY) - free report >>

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