A strong stock as of late has been Fastly (FSLY). Shares have been marching higher, with the stock up 102.2% over the past month. The stock hit a new 52-week high of $19.14 in the previous session. Fastly has gained 79.4% since the start of the year compared to the -2.6% gain for the Zacks Computer and Technology sector and the -12.1% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 11, 2026, Fastly reported EPS of $0.12 versus consensus estimate of $0.06.
For the current fiscal year, Fastly is expected to post earnings of $0.17 per share on $711.06 in revenues. This represents a 30.77% change in EPS on a 13.95% change in revenues. For the next fiscal year, the company is expected to earn $0.26 per share on $786.99 in revenues. This represents a year-over-year change of 57.84% and 10.68%, respectively.
Valuation Metrics
While Fastly has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Fastly has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 110.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 19.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Fastly currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Fastly passes the test. Thus, it seems as though Fastly shares could have potential in the weeks and months to come.
How Does FSLY Stack Up to the Competition?
Shares of FSLY have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Karooooo Ltd. (KARO). KARO has a Zacks Rank of #2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Karooooo Ltd. beat our consensus estimate by 11.36%, and for the current fiscal year, KARO is expected to post earnings of $2.25 per share on revenue of $332.58 million.
Shares of Karooooo Ltd. have gained 3.8% over the past month, and currently trade at a forward P/E of 23.64X and a P/CF of 17.32X.
The Internet - Software industry is in the top 37% of all the industries we have in our universe, so it looks like there are some nice tailwinds for FSLY and KARO, even beyond their own solid fundamental situation.
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Fastly, Inc. (FSLY): Free Stock Analysis Report Karooooo Ltd. (KARO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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