Fastly(US:FSLY) ZACKS·2025-07-04 17:16Core Insights - Fastly's Security segment is becoming a significant contributor to its edge platform strategy, with Q1 2025 revenues of $26.4 million, reflecting a 7% year-over-year increase and accounting for 18% of total revenues [1][10] Group 1: Security Segment Performance - The Security portfolio is designed for low-latency, automated protection across web and API environments, including solutions like Client-Side Protection, API shielding, DDoS detection, and bot mitigation [2] - Ongoing product additions and upgrades are driving momentum in the Security portfolio, with features like Client-Side Protection for unauthorized activity detection and Attack Insights for real-time DDoS traffic visibility [3][4] Group 2: Competitive Landscape - Fastly's Security stack faces competition from Fortinet and Cloudflare, both enhancing their solutions for secure digital infrastructure [5] - Fortinet is gaining traction with advanced capabilities in bot protection and API security, making it a strong competitor in Fastly's core markets [6] - Cloudflare is expanding its security platform with advanced DDoS protection and bot management, positioning it as a direct competitor to Fastly [7] Group 3: Financial Performance and Valuation - Fastly's shares have declined 25.5% year-to-date, contrasting with a 7% increase in the broader Zacks Computer & Technology sector and a 14.4% appreciation in the Zacks Internet Software industry [8] - Fastly's forward 12-month price-to-sales ratio is 1.63X, significantly lower than the industry's 5.74X, indicating a potential undervaluation [11] - The Zacks Consensus Estimate for Fastly's second-quarter loss is 5 cents per share, reflecting a 28.57% improvement year-over-year, while the 2025 loss estimate is 9 cents per share, indicating a 25% year-over-year improvement [14]