Fastly

Fastly is the IPO-class-of-2019 edge-cloud and CDN operator that everyone wrote off after the 2021 collapse from 130 USD to 9 USD. By May 2026 the stock sits at 17 USD with a 2.7B USD market cap. The question is whether Fastly has rebuilt under CEO Todd Nightingale (ex-Cisco) into a credible Cloudflare alternative, or whether the structural disadvantages versus the much larger Cloudflare and Akamai are permanent.

The 2024-2025 transformation under Nightingale focused on three things. First, simplifying the product portfolio away from compute-heavy edge functions that were burning cash. Second, refocusing on premium content delivery for media and gaming customers where Fastly has differentiated low-latency. Third, building a credible security stack on Signal Sciences plus newer WAF and bot management products.

By Q1 2026 Fastly returned to 23% revenue growth — the first time above 20% since 2021 — with adjusted gross margin recovering to 59%. The product portfolio is now coherent, the largest customers (Shopify, NYT, Stripe, Reddit) have stayed despite the 2021 outage trauma, and the cash burn has narrowed materially. But the customer concentration risk and the gap to Cloudflares scale remain real.

Fastlys 13F is a mix of bag-holders and tactical accumulators. Sutter Hill Ventures and Iconiq Capital (the original pre-IPO backers) have held throughout the collapse — neither has trimmed in the past 24 months. Their 8% combined holding is the largest insider-adjacent block.

2025 saw a notable activist entry: JANA Partners built a 3.5% position in Q3 2025 and has publicly advocated for strategic review including a possible sale to a private equity buyer or strategic acquirer (Cisco, Akamai). JANAs typical playbook plus Fastlys product portfolio coherence make this a credible setup.

Insider activity in 2026 was net positive. CFO Ronald Kisling made an open-market purchase of 25,000 shares at 13 USD in February 2026. Several VP-level executives have small accumulating positions. No 10b5-1 sells from senior leadership in 2026 — a notable absence given the multi-year trough recovery.

Fastly trades at 3.8x forward EV/Sales on 2026 consensus revenue of 850M USD — a deep discount to Cloudflare at 18x and Akamai at 3.2x. The discount is partially justified by smaller scale and slower growth than Cloudflare, but the gap is wider than fundamentals warrant given the 2026 growth re-acceleration. Sell-side targets range from 12 USD (Goldman Sachs, bear case at execution stall) to 28 USD (Truist, bull case with JANA-driven strategic transaction). Take-private fair value at 22-25 USD implies 30-45% upside on the JANA-catalyst scenario. Public-market fair value at 18-20 USD implies modest upside on operational execution alone.

1. July 2026: Q2 2026 results — second quarter to confirm or reverse the 23% growth re-acceleration from Q1
2. Q4 2026: JANA Partners strategic review pressure — possible announcement of takeover process or operational milestones
3. Q2 2027: First fully positive free cash flow guidance — milestone for transition from turnaround to sustainable growth

Fastly is a deep-cycle turnaround that has finally re-accelerated growth and added a credible JANA-driven activist catalyst. The 17 USD entry price puts the stock at 3.8x EV/Sales — cheaper than the worst-case I would assume for a 20% growth software business. The Cloudflare structural-disadvantage debate is the bull-bear axis. I size FSLY at 1-2% as a binary call option on either operational execution or JANA-driven strategic transaction. My hard stop is below 12 USD; my trim target is 22-24 USD on the catalyst hit.