Strength Seen in Fastly (FSLY): Can Its 10.7% Jump Turn into More Strength?

Fastly FSLY shares ended the last trading session 10.7% higher at $49.57. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 5.5% gain over the past four weeks.

The upside in Fastly’s share price can be attributed to the news that it has been granted a U.S. patent titled “load balancing across origin servers.” Moreover, the company is riding on an expanding customer base.

This cloud software developer is expected to post quarterly loss of $0.19 per share in its upcoming report, which represents a year-over-year change of -375%. Revenues are expected to be $84.23 million, up 19.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Fastly, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FSLY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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