Fastly(US:FSLY) ZACKSยท2024-10-18 17:00Core View - Fastly has been upgraded to a Zacks Rank 1 (Strong Buy), reflecting an upward trend in earnings estimates, which is a powerful force impacting stock prices [1] - The Zacks rating system is useful for individual investors as it tracks earnings estimate revisions, a key factor influencing near-term stock price movements [1][2] - Fastly's upgrade to Zacks Rank 1 positions it in the top 5% of Zacks-covered stocks, indicating superior earnings estimate revisions and potential for market-beating returns [5] Earnings Estimate Revisions - Fastly is expected to earn -$0.14 per share for the fiscal year ending December 2024, representing a year-over-year change of 17.7% [4] - Over the past three months, the Zacks Consensus Estimate for Fastly has increased by 11.6% [4] - Rising earnings estimates and the consequent rating upgrade imply an improvement in Fastly's underlying business [2] Zacks Rank System - The Zacks Rank system uses four factors related to earnings estimates to classify stocks into five groups, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [3] - The system maintains an equal proportion of 'buy' and 'sell' ratings, with only the top 5% of Zacks-covered stocks receiving a 'Strong Buy' rating [5] - Fastly's placement in the top 5% of Zacks-covered stocks indicates its superior earnings estimate revision feature [5] Institutional Influence - Institutional investors use earnings and earnings estimates to calculate the fair value of a company's shares, leading to price movements based on their bulk investment actions [2] - An increase or decrease in earnings estimates in valuation models results in higher or lower fair value for a stock, influencing institutional buying or selling [2]