• If you are wondering whether Fastly at around US$23.76 is a bargain or already pricing in big expectations, you are in the right place to unpack what the current share price really reflects.
• The stock has seen a 3.3% decline over the past week and a 20.2% decline over the past month, yet it still sits on a 133.2% return year to date and a 304.8% return over the last year, which can signal shifting views on both its potential and its risks.
• Recent coverage around Fastly has focused on its position in edge computing and content delivery, as investors reassess how integral its platform could be to internet infrastructure. At the same time, commentary has highlighted competition in the sector and the need to weigh these expectations against what is already reflected in the share price.
• Despite these big moves, Fastly currently has a valuation score of 0 out of 6. The rest of this article will break down traditional valuation tools like DCFs and multiples, and then finish with a framework that can help you think about value in a more complete way.

Fastly scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Fastly Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a company could be worth today by projecting future cash flows and discounting them back to the present using a required rate of return.

For Fastly, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flows in $. The latest twelve month free cash flow is around $51.26 million. Analyst and extrapolated projections suggest free cash flow of $44.56 million in 2026, stepping up through the forecast period to $95.40 million in 2030, with further extrapolated values out to 2035.

When all of these projected cash flows are discounted back to today, Simply Wall St’s DCF output suggests an estimated intrinsic value of about $9.15 per share, compared with the current share price of roughly $23.76. That gap translates into an implied 159.8% overvaluation based on this specific model and its assumptions.

On this view, the current price already incorporates cash flow expectations well above the DCF estimate.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Fastly may be overvalued by 159.8%. Discover 55 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Fastly Price vs Sales (P/S)

For a business where earnings are not the cleanest guide, the Price to Sales (P/S) ratio is often more useful because it compares the market value of the company with the revenue it generates, rather than with profits that can be small or volatile.

Growth expectations and risk still matter a lot. Higher expected revenue growth or lower perceived risk can justify a higher P/S multiple, while slower growth or higher uncertainty tends to support a lower, more conservative multiple.

Fastly currently trades on a P/S of 5.78x. This sits above both the IT industry average of 1.77x and the peer group average of 4.63x, which suggests the market is assigning a richer valuation multiple than these broad benchmarks. Simply Wall St’s Fair Ratio for Fastly is 4.02x. This is its proprietary view of what a more reasonable P/S might be once factors like revenue growth, margins, industry, market cap and risk profile are taken into account. This tailored Fair Ratio can be more informative than a simple comparison with peers or the sector because it attempts to adjust for Fastly’s own characteristics rather than treating all companies as alike. On this basis, Fastly’s current 5.78x P/S looks higher than the Fair Ratio of 4.02x.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Fastly Narrative

Earlier it was mentioned that there is an even better way to think about valuation. On Simply Wall St this comes through Narratives, where you set out your story for Fastly, link it to your own assumptions for future revenue, earnings and margins, and the platform turns that into a Fair Value you can compare with the current price on the Community page used by millions of investors.

A Narrative is your view of what is really happening with the business, written in plain language, then connected directly to a financial forecast so that your story, numbers and Fair Value all line up and update automatically when fresh information like earnings or news is added.

With Fastly, one investor might build a cautious Narrative that lines up closer to a Fair Value around US$4.97, while another might lean toward a more optimistic view closer to US$20.00. By comparing each Fair Value with the current share price you can decide whether the market is asking you to pay up for the optimistic story or offering you terms that fit a more conservative one.

Do you think there's more to the story for Fastly? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.