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What to Expect From FireEye (FEYE) This Earnings Season?

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FireEye Inc. is slated to release first-quarter 2018 results on May 2. Notably, the company beat estimates in each of the trailing four quarters, delivering an average positive earnings surprise of 93.7%. In the last reported quarter, the company came up with a positive earnings surprise of 200%.

The Zacks Consensus Estimate for the first quarter is pegged at a loss of 4 cents per share, indicating 55.6% improvement on a year-over-year basis. Revenues are estimated to be around $194.11 million, indicating an 11.7% increase from the year-ago quarter.

What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

FireEye has a Zacks Rank #3 and an Earnings ESP of +6.67%, which indicates a likely beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

What’s Driving the Better-Than-Expected Results?

We are optimistic about FireEye, given a healthy security market, strong product lineup, deal wins and investment plans, which should boost results. The company’s continued focus on enhancing its product capabilities will bring in new customers, in turn, driving its top-line performance further.

Notably, the company recently entered into a patent license agreement with Finjan. Per the agreement, all pending litigation matters between the companies have been resolved and the duo have granted each other cross-licenses. This is expected to be beneficial for FireEye’s top line.

Moreover, the company’s inorganic additions are expected to drive growth. In January 2018, the company announced the acquisition of X15 Software with an aim to incorporate the latter’s Big Data platform into its security solutions to counter cyber-attacks.

Additionally, FireEye’s shift from product-based to subscription-based business model will lead to more stable revenues and higher gross margins and eventually aid the bottom line.

FireEye, Inc. Price and EPS Surprise

FireEye, Inc. Price and EPS Surprise | FireEye, Inc. Quote

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Paycom Software, Inc. (PAYC - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Seagate Technology PLC (STX - Free Report) has an Earnings ESP of +3.43% and a Zacks Rank #1.

Analog Devices, Inc. (ADI - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #1.

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