Oppenheimer starts Cloudflare at outperform, Fastly at perform

Investing.com -- Oppenheimer analysts initiated coverage on Cloudflare (NYSE:NET) with an Outperform rating and Fastly (NYSE:FSLY) with a Perform rating in separate notes Thursday. 

Cloudflare was given a $150 price target, citing confidence in the company’s "platformization" strategy and ease of adoption. 

Meanwhile, for Fastly, analysts highlighted near-term challenges despite the company’s long-term potential.

Oppenheimer believes Cloudflare is well-positioned to drive long-term growth through its expanding security and developer offerings. 

"We believe the company is seeing continued success with its 'platformization' strategy and ease of adoption, which allows customers to add new modules with a ‘single click,’" the analysts wrote. 

The firm pointed to recent leadership changes—including the hiring of Mark Anderson as President of Revenue and CJ Desai as President of Product&Engineering—as a positive signal for future expansion efforts. 

Analysts also expressed confidence that Cloudflare could exceed its 25% revenue growth target for 2025 and return to a 30%+ revenue CAGR in the longer term.

On the other hand, Fastly is said to face operational hurdles that could limit its near-term performance, according to Oppenheimer. 

"We see a few operational hurdles for the company in CY25, including: (1) risk with successful expansion of the Security and Compute/Observability portfolios and its adoption; (2) ability to combat the industry norm of high-teens decline in CDN pricing; and (3) S&M pivot to address the newer opportunities," analysts noted. 

The firm is taking a cautious stance on Fastly until management demonstrates progress in these areas.

Elsewhere, Akamai Technologies (NASDAQ:AKAM) was also initiated with an Outperform rating and $100 price target, with Oppenheimer stating:  “We see outsized opportunity for Akamai in its Security and Compute portfolio, which can accelerate topline growth.”