We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
FireEye (FEYE): What's in Store for the Stock in Q2 Earnings?
Read MoreHide Full Article
FireEye Inc. is set to report second-quarter 2016 results on Aug 4. Last quarter, the company posted a narrower-than-expected loss. Let’s see how things are shaping up for this announcement.
Factors at Play
FireEye, headquartered in Milpitas, CA, is a global provider of web, email, file and malware security to both enterprises and governments. Near-term prospects for FireEye are not very promising as the impact of changing customer spending behavior has already been reflected in the quarterly results of several other players in this space.
During the second quarter, it was noted that companies in this space have been breaking their cybersecurity investment plans in phases and implementing the same over a longer duration of time, instead of making a single large investment.
As a result, we are concerned that 2016 spending may fall to 2014 levels. Notably, cybersecurity spending by these companies skyrocketed last year due to a series of high-profile security breaches.
Furthermore, we have recently been noticing that FireEye is losing business to its rivals. In spite of witnessing year-over-year revenue growth, the top line has missed the Zacks Consensus Estimate in each of the three trailing quarters. On the other hand, rivals such as Fortinet Inc. and Palo Alto Networks Inc. (PANW - Free Report) reported revenues that were not only higher on a year-over-year basis, but were also above the Zacks Consensus Estimate.
The company has failed to impress on the bottom-line front as well. Since Sep 2013, when it was listed on the NASDAQ Stock Exchange, the company has not been able to report profits for even a single quarter.
Nonetheless, FireEye’s management has been trying hard to turn the business around. During first-quarter 2016, the company acquired iSIGHT Partners to strengthen its current product line-up and offer an intelligence-led security model for enterprises of any size that other security providers will find difficult to match.
FireEye also acquired Invotas, a firm specializing in improving response times after attacks, during the quarter. Invotas’ lead product – Security Orchestrator – has been designed to compile information from a range of security products and automate responses when an incident occurs.
Furthermore, the company launched FireEye Essentials, a lower-cost and simpler version of the FireEye Global Threat Management platform. It is targeting the smaller, mid-market companies with this new offering.
These moves are important as they indicate FireEye’s efforts on moving past the enterprise-level end-point protection products it had started with. Also, these factors are likely to aid results in the to-be-reported quarter.
Our proven model does not conclusively show that FireEye is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for FireEye is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 80 cents.
Zacks Rank: FireEye has a Zacks Rank #3. Though this increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are a couple of stocks that you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Qualys Inc. (QLYS - Free Report) , with an Earnings ESP of +12.50% and a Zacks Rank #3.
CenturyLink Inc. , with an Earnings ESP of +1.70% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
FireEye (FEYE): What's in Store for the Stock in Q2 Earnings?
FireEye Inc. is set to report second-quarter 2016 results on Aug 4. Last quarter, the company posted a narrower-than-expected loss. Let’s see how things are shaping up for this announcement.
Factors at Play
FireEye, headquartered in Milpitas, CA, is a global provider of web, email, file and malware security to both enterprises and governments. Near-term prospects for FireEye are not very promising as the impact of changing customer spending behavior has already been reflected in the quarterly results of several other players in this space.
During the second quarter, it was noted that companies in this space have been breaking their cybersecurity investment plans in phases and implementing the same over a longer duration of time, instead of making a single large investment.
As a result, we are concerned that 2016 spending may fall to 2014 levels. Notably, cybersecurity spending by these companies skyrocketed last year due to a series of high-profile security breaches.
Furthermore, we have recently been noticing that FireEye is losing business to its rivals. In spite of witnessing year-over-year revenue growth, the top line has missed the Zacks Consensus Estimate in each of the three trailing quarters. On the other hand, rivals such as Fortinet Inc. and Palo Alto Networks Inc. (PANW - Free Report) reported revenues that were not only higher on a year-over-year basis, but were also above the Zacks Consensus Estimate.
The company has failed to impress on the bottom-line front as well. Since Sep 2013, when it was listed on the NASDAQ Stock Exchange, the company has not been able to report profits for even a single quarter.
Nonetheless, FireEye’s management has been trying hard to turn the business around. During first-quarter 2016, the company acquired iSIGHT Partners to strengthen its current product line-up and offer an intelligence-led security model for enterprises of any size that other security providers will find difficult to match.
FireEye also acquired Invotas, a firm specializing in improving response times after attacks, during the quarter. Invotas’ lead product – Security Orchestrator – has been designed to compile information from a range of security products and automate responses when an incident occurs.
Furthermore, the company launched FireEye Essentials, a lower-cost and simpler version of the FireEye Global Threat Management platform. It is targeting the smaller, mid-market companies with this new offering.
These moves are important as they indicate FireEye’s efforts on moving past the enterprise-level end-point protection products it had started with. Also, these factors are likely to aid results in the to-be-reported quarter.
FIREEYE INC Price and EPS Surprise
FIREEYE INC Price and EPS Surprise | FIREEYE INC Quote
Earnings Whispers
Our proven model does not conclusively show that FireEye is likely to beat the Zacks Consensus Estimate in its upcoming release. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: The Earnings ESP for FireEye is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 80 cents.
Zacks Rank: FireEye has a Zacks Rank #3. Though this increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are a couple of stocks that you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Qualys Inc. (QLYS - Free Report) , with an Earnings ESP of +12.50% and a Zacks Rank #3.
CenturyLink Inc. , with an Earnings ESP of +1.70% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>