Fastly (NYSE:FSLY) was a coronavirus pandemic performer, but FSLY stock has been in a rut since February. The slide continues, with Fastly shares down a further 6% at times during trading on Wednesday. FSLY is now down 43% since its all-time high close of $117.86 in February. That’s a far cry from the 328% return for Fastly shares in 2020.

Investors have been turning away from content delivery networks (CDNs) like Fastly in 2021.

With vaccines going into arms, workers returning to offices and shoppers returning to stores, there is a fear that the heady growth days of 2020 are over for companies like Fastly. With FSLY now trading in the $67 range, that has opened the door for investors who believe this CDN offers big long-term growth potential.

The Importance of CDNs Like Fastly

First, lets answer the following questions: What is a CDN, and why are CDN companies like Fastly so important?

CDNs operate widely distributed data centers. They host content for online services including websites, e-commerce sites and streaming video providers. The CDN balances traffic so end users access data centers that are either closer to their physical location, or under a lower demand load. This makes the experience much faster for the user. At the same time Fastly is improving the speed (and uptime) experience for the end user, the company is also providing enhanced security.

I’ll let UMass Amherst’s College of Information and Computer Sciences professor Ramesh Sitaraman have the final word. He recently won an industry award for his work on CDNs. According to professor Sitaraman: “CDNs may be the most important technical breakthrough you have never heard of … CDNs are what make your web pages load faster, make your videos play continuously without freezes, and enable billions of people around the world to watch a live soccer game on the internet.”

Given the demand for online services during the pandemic, it’s no wonder that Fastly saw its revenue increase 45% year over year. Or that FSLY stock delivered 328% growth in 2020.

Growth Prospects for the CDN Market

It makes sense that the demand for CDNs was up in a big way in 2020. Online shopping, video streaming, online gaming, remote work and video conferencing were way up. But now that vaccination is well under way and the country is opening back up, does that mean the demand for CDNs is going to stall?

Industry researchers don’t think so. A report just released today projects the global CDN market will hit $48.48 billion in 2025. That’s a CAGR of nearly 30%. That kind of demand growth bodes well for the long-term growth prospects for FSLY stock.

Bottom Line on FSLY Stock

The big concern among analysts is that CDNs like Fastly won’t be able to keep up the customer acquisition pace they set during the pandemic. That’s a fair concern. 2020 was extraordinary. But that doesn’t mean growth is going to fall off altogether.

You can see this concern reflected in analyst ratings. Those polled by CNN Business have FSLY stock rated as a consensus “Hold.” At the same time, their median price target of $80 has 18% upside.

That brings us back to the question of whether now is the time to consider an investment in FSLY. From my perspective, this is a company with a proven business model, in a market that continues to see high demand. Maybe not 2020-level demand growth, but a CAGR of 30% over the next five years is more than healthy.

Fastly will have to continue to fight with market leaders for new customers, but it did pretty well in 2020 and has signed up some of the biggest online players.

The bottom line is there are no guarantees here — FSLY rates a ‘B’ in Portfolio Grader — but the future looks positive for CDNs and Fastly. Being able to pick up FSLY stock at a 44% discount compared to its price in February is tempting. That’s especially true if you approach it from a long-term growth perspective.

— Louis Navellier and the InvestorPlace Research Staff

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Source: Investor Place