Shares of Fastly, Inc. (FSLY) plummeted 6.51% in pre-market trading on Thursday, as investors reacted to a critical analysis highlighting several concerns about the company's performance and financial health. The significant drop comes amid broader market uncertainty and growing skepticism about Fastly's ability to compete effectively in the content delivery and edge cloud computing services sector.

A recent report outlined three key reasons why investors might consider selling FSLY stock. First, the company's long-term revenue growth has been disappointing, with a 15.3% compound annual growth rate over the past three years, which falls short of expectations for the software sector. Second, Fastly's gross margin, averaging 54.4% over the last year, is substantially lower than most software businesses, indicating high infrastructure costs. Lastly, the company's financial position is concerning, with cash burn and debt levels that could potentially lead to shareholder dilution if not addressed promptly.

These factors have contributed to a negative sentiment surrounding Fastly's stock, which has already experienced a 14% loss over the past six months, underperforming the S&P 500. Analysts suggest that despite the recent price decline, the potential upside for FSLY may be limited compared to the downside risks. As investors reassess their portfolios in light of these concerns, the pre-market sell-off indicates a growing lack of confidence in Fastly's near-term prospects and long-term competitive position in the market.