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Why Shares of FireEye (FEYE) Rallied in the Last 10 Days?
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It has been over 10 days since FireEye Inc. reported third-quarter 2016 results. Following the release, the stock has been on the rise. To some investors, choosing the stock may appear to be a no-brainer because right after an earnings release, a company is almost always on investors’ radar. While better-than-expected results make the stock a good pick, lower-than-expected results dampen investors’ spirit. So, the period following earnings releases is often marked by high market activity.
Shares Marching Higher
FireEye reported its quarterly numbers on Nov 3, following which its shares have gained approximately 28% so far. Although the cyber security solution provider posted an adjusted loss (excluding one-time items but including stock-based compensation) of 46 cents per share, it was significantly narrower than the Zacks Consensus Estimate of a loss of 68 cents as well as the year-ago quarter’s loss of 75 cents.
FireEye’s third-quarter revenues increased 12.6% year over year to $186.4 million. The improvement was primarily driven by a large number of deal wins and customer additions during the quarter. New product launches were also one of the main reasons behind this tremendous growth. FireEye witnessed strong customer additions in the Asia Pacific and Middle East regions.
Notably, the company closed 47 transactions with an individual value of over $1 million and added 287 new customers during the quarter. Moreover, it closed its first ever seven figure transaction for FireEye Security Orchestrator.
Moreover, quarterly revenues came ahead of the Zacks Consensus Estimate of $182 million as well as the company’s own guidance range of $180 million to $186 million (mid-point: $183 million).
An upbeat guidance for non-GAAP operating margin and earnings per share for 2016 also helped in boosting investors’ confidence about the company’s future prospects.
In the last 30 days, the Zacks Consensus Estimate for the fourth quarter and full-year 2016 witnessed upward revisions. Four of the five analysts covering the stock revised their estimates upward for both the aforementioned periods.
For the fourth quarter, the Zacks Consensus Estimate is currently pegged at a loss of 49 cents per share, which is way below from the loss of 57 cents projected 30 days ago. Similarly, the Zacks Consensus Estimate for 2016 is currently pegged at a loss of $2.49 cents per share compared with a loss of $2.80 projected 30 days ago.
Growth Initiatives
We are optimistic about FireEye given a healthy security market, strong product lineup, deal wins and investment plans, which should boost results in the long run. Furthermore, FireEye’s strategy of growing through acquisitions is encouraging. The latest buyouts were that of iSIGHT Partners and Invotas. The deals have beefed up FireEye’s cyber security suite and enhanced its competitive dynamics.
Furthermore, FireEye on Nov 3 announced its new Cloud MVX and MVX Smart Grid offerings, lower cost intelligent threat detection solutions for large enterprises as well as mid-market businesses. While MVX Smart Grid is currently available, the Cloud MVX will be launched later this month. All these indicate FireEye’s efforts to move beyond the enterprise level, end-point protection products it had initially started off with.
Some other stocks in the Internet software space worth considering are Cvent Inc. , F5 Networks, Inc. (FFIV - Free Report) and Amber Road, Inc. .
Cvent, which sports a Zacks Rank #1 has witnessed upward estimate revisions in the last seven days and has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters with an average positive surprise of 42.02%.
F5 Networks, which carries a Zacks Rank #2 has witnessed upward estimate revisions in the last 30 days and has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters with an average positive surprise of 3.37%.
Amber, which carries a Zacks Rank #2, has witnessed upward estimate revisions in the last 30 days and has surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 29.95%.
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Why Shares of FireEye (FEYE) Rallied in the Last 10 Days?
It has been over 10 days since FireEye Inc. reported third-quarter 2016 results. Following the release, the stock has been on the rise. To some investors, choosing the stock may appear to be a no-brainer because right after an earnings release, a company is almost always on investors’ radar. While better-than-expected results make the stock a good pick, lower-than-expected results dampen investors’ spirit. So, the period following earnings releases is often marked by high market activity.
Shares Marching Higher
FireEye reported its quarterly numbers on Nov 3, following which its shares have gained approximately 28% so far. Although the cyber security solution provider posted an adjusted loss (excluding one-time items but including stock-based compensation) of 46 cents per share, it was significantly narrower than the Zacks Consensus Estimate of a loss of 68 cents as well as the year-ago quarter’s loss of 75 cents.
FireEye’s third-quarter revenues increased 12.6% year over year to $186.4 million. The improvement was primarily driven by a large number of deal wins and customer additions during the quarter. New product launches were also one of the main reasons behind this tremendous growth. FireEye witnessed strong customer additions in the Asia Pacific and Middle East regions.
Notably, the company closed 47 transactions with an individual value of over $1 million and added 287 new customers during the quarter. Moreover, it closed its first ever seven figure transaction for FireEye Security Orchestrator.
Moreover, quarterly revenues came ahead of the Zacks Consensus Estimate of $182 million as well as the company’s own guidance range of $180 million to $186 million (mid-point: $183 million).
An upbeat guidance for non-GAAP operating margin and earnings per share for 2016 also helped in boosting investors’ confidence about the company’s future prospects.
FIREEYE INC Price
FIREEYE INC Price | FIREEYE INC Quote
Upward Estimate Revisions
In the last 30 days, the Zacks Consensus Estimate for the fourth quarter and full-year 2016 witnessed upward revisions. Four of the five analysts covering the stock revised their estimates upward for both the aforementioned periods.
For the fourth quarter, the Zacks Consensus Estimate is currently pegged at a loss of 49 cents per share, which is way below from the loss of 57 cents projected 30 days ago. Similarly, the Zacks Consensus Estimate for 2016 is currently pegged at a loss of $2.49 cents per share compared with a loss of $2.80 projected 30 days ago.
Growth Initiatives
We are optimistic about FireEye given a healthy security market, strong product lineup, deal wins and investment plans, which should boost results in the long run. Furthermore, FireEye’s strategy of growing through acquisitions is encouraging. The latest buyouts were that of iSIGHT Partners and Invotas. The deals have beefed up FireEye’s cyber security suite and enhanced its competitive dynamics.
Furthermore, FireEye on Nov 3 announced its new Cloud MVX and MVX Smart Grid offerings, lower cost intelligent threat detection solutions for large enterprises as well as mid-market businesses. While MVX Smart Grid is currently available, the Cloud MVX will be launched later this month. All these indicate FireEye’s efforts to move beyond the enterprise level, end-point protection products it had initially started off with.
We expect its sustained focus on new product launches and acquisitions to contribute significantly to this Zacks Rank #2 (Buy) stock’s overall growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
Some other stocks in the Internet software space worth considering are Cvent Inc. , F5 Networks, Inc. (FFIV - Free Report) and Amber Road, Inc. .
Cvent, which sports a Zacks Rank #1 has witnessed upward estimate revisions in the last seven days and has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters with an average positive surprise of 42.02%.
F5 Networks, which carries a Zacks Rank #2 has witnessed upward estimate revisions in the last 30 days and has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters with an average positive surprise of 3.37%.
Amber, which carries a Zacks Rank #2, has witnessed upward estimate revisions in the last 30 days and has surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 29.95%.
"Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>"