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FireEye, Inc.

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FireEye’s turnaround efforts such as product refreshes, acquisitions and cost optimization are paying off, as reflected from the company’s improving top and bottom lines performance for the past few quarters. Going ahead, a healthy security market, strong product line-up, deal wins and investment plans should boost results in the long run. Additionally, although a shift from product-based to subscription-based business model will have a negative impact on FireEye’s near-term results, we believe that it will lead to more stable revenues in the long-run. Estimates have been stable lately ahead of the company’s Q2 earnings release. Nonetheless, shorter-length contracts remain a concern as though they generally generate higher margins compared with three-year contracts, they adversely impact near-term top-line growth. The stock has underperformed the industry on a year-to-date basis.


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