What is Fastly (FSLY)? Analysts say the best performing tech stock during the pandemic may still have room to run

Zoom has been dethroned.

While the videoconferencing company we’ve no doubt all used in the past three months has seen a massive 159% rally since its Feb. 19 market peak, Fastly, a cloud computing services provider, has gained over 222% in the same time frame—and now clinches the title of the best-performing work-from-home stock during the pandemic.

For most people, Credit Suisse’s Brad Zelnick argues, Fastly “was lost in the shuffle a little bit.” But now, it’s certainly “come to the forefront.”

Fastly is a content delivery network (CDN) company that helps users view digital content more quickly. The company also provides security, video delivery, and so-called edge computing services. Some of its biggest customers? Heavy hitters like Slack, Airbnb, Spotify, and Stripe, to name a few.

Add in a new CEO, Joshua Bixby (who took the helm in February), and a follow-on stock sale of 6 million shares in May, and it’s certainly been an eventful few months for Fastly.

Many firms (like Zoom) are benefiting from the shift to working from home—a trend many analysts and experts expect will have a lasting impact even after employees return to their offices. Meanwhile, shelter-in-place orders have led people to spend more time in front of screens, to shop online, and to digest more streaming and video content.

Against that backdrop, Fastly’s outperformance isn’t a surprise for those like D.A. Davidson’s Rishi Jaluria. But Jaluria, who has the highest price target on the Street for the stock, suggests Fastly is unique because it has two tailwinds going for it: “It can benefit in multiple ways: It’s not purely work from home; it’s not purely shelter in place; it kind of has areas that benefit on both sides,” he tells Fortune.

The company is reaping gains from the surge of online traffic and from work-from-home staples like messaging app Slack and GitHub. And Jaluria, for one, doesn’t think these “behavioral changes you get from work from home are reversible now.”

Meanwhile, with e-commerce giants like Wayfair and Shopify as customers, Fastly has been able to ride the surge in online shopping along with its customers—so there are “multiple ways they benefit, not just one or the other,” Jaluria notes.

It hasn’t hurt that Fastly also reported a strong first quarter in May, as revenue popped 38% from the year-ago quarter. The company also raised earnings guidance for the year from $265 million to as much as $290 million (although Jaluria, for one, thinks they might raise estimates still more). Yet the company has thus far been conservative about how long the benefits of work from home and the pandemic may last. Management has projected the benefits of work from home (and the surge in traffic) may start dying down by the end of the second quarter (in the next couple weeks).

But analysts note the pandemic is likely long from over and suggest that conservatism opens up the possibility of a surprise to the upside.

“We always talk about what’s happening with COVID is accelerating existing trends. I think that’s exactly what’s happening with Fastly,” Jaluria argues. “This isn’t a temporary thing, and as things ease up, that benefit goes away. I think these are longer-lasting benefits that Fastly should benefit from.”

Other analysts like Credit Suisse’s Zelnick think there’s a bigger picture to Fastly’s momentum that isn’t tied to the pandemic: edge computing. In layman’s terms, edge computing is essentially data computing that is done closer to the end user, and content delivery is “further distributed and pushed out closer and closer to the end user of these applications,” Zelnick explains. It’s this “broader edge computing and this broader architectural shift that’s happening [that] is going to benefit Fastly for many years to come, not just during a time of pandemic,” he contends. And in light of the rise of 5G and the Internet of things, Jaluria suggests Fastly may be well positioned.

Yet Fastly certainly isn’t alone as a content delivery network, and other competitors like Cloudflare and Akamai have also seen a boost in the past few months, all boasting market caps much larger than Fastly’s $7.6 billion. And as far as valuations go, much like Zoom, Fastly doesn’t come cheap, and Zelnick points out valuations in the software space are historically elevated. Meanwhile, a faster return to normalcy from the pandemic and potential decrease in traffic could hurt the business as well, and analysts point out barriers to entry in the space aren’t all that high.

But those like Jaluria and Zelnick note Fastly is a favorite among software developers, and more important, Zelnick argues, the company is “leveraged to the future state architecture for digital experiences and mobile and web applications for many, many years to come.”

Fastly gained another 6% Tuesday and was trading at roughly $77 a share in intraday trading, but some analysts see even more room to run for the stock. “If you were to ask me a month ago if I thought Zoom’s run-up was sustainable, I would have said, ‘No, this is insane,’” Jaluria says. But “do I think [Fastly’s stock] can continue working as long as they continue to execute as well as they have been? Yes.”