Fastly is a bright example of a Content Delivery Network (CDN) software company. Its shares are now trading 90% off their peak levels of 2021. The company’s services enable online content to be delivered with maximised efficiency thanks to wide-area server networks. Investors are betting on the increasing importance of the internet in everyday life that would boost online services and providers earnings.

Clients of Fastly only pay for used network capacities while network traffic is rising steadily. In the first three months of 2022, users i paid 14% above the level of Q1 2021. However, investors were concerned that TikTok, the largest client of Fastly, would stop using its services in 2020. Such concerns are now seen groundless as the company has effectively diversified earnings sources, boosting revenues by 21% year-on-year to $102.4 million in the Q1 2022, while Wall Street’s analysts were expecting only $99 million.

Enterprise value (EV) is at $2 billion with $410 million revenues expected in 2022. Thus, a forward EV/Sales ratio is at 4.9, while it was at 20 last year.

The mid-term target price for Fastly is expected at $20.