Quickly, Inc. (NYSE:FSLY) jumped about 4.5% during premarket trading on Monday, as the cloud company continues to capture greater market share with its content delivery network, or CDN, business.
Investment bank Piper Sandler quickly moved to Overweight from Neutral, based in part on the company gets a larger share of the CDN market and a favorable competitive field.
“It is rapidly gaining share in the mainstream CDN market, largely due to exposure to media distribution, with inputs such as our CDN Tracker suggesting gains continue,” said James Fish, senior research analyst at Piper Sandler . “There are multiple drivers of confidence in the sustainability of Fastly’s CDN business, including the favorable competitive landscape, stabilization of OTT metrics and new packaging.”
Piper Sandler’s CDN Tracker shows that Fastly’s share of the CDN market has increased from less than 10% to more than 15% over the past three years.
Despite the update, Piper Sandler lowered his price target on Fastly to $16 from $19.
The recent price decline has led to a positive risk-reward scenario based on current valuations and equity fundamentals, Fish added. Additionally, new products like Bot Management and API Security could drive growth another 6%-8%.
Fastly’s clients include some of the media industry’s largest players, such as Walt Disney (DIS) and Warner Bros. Discovery (WBD).
Fastly has a buy rating from both Seeking Alpha and Wall Street analysts. It has a Hold rating from Seeking Alpha’s quantitative system, which regularly beats the market.