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Here's Why You Should Hold on to FireEye (FEYE) Stock Now
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FireEye, Inc. is benefiting from strong traction in the cybersecurity market, increased adoption of its services, growing clientele, and focus on shifting its business model to a subscription-based one.
The company surpassed the Zacks Consensus Estimate in each of the trailing four reported quarters, the average being a whopping 125%.
With expected long-term earnings per share growth rate of 16% and a market cap of $3.2 billion, investors need to consider retaining the stock in their portfolio for long-term gains.
Let’s delve deeper and analyze FireEye’s prospects.
Growth Drivers
FireEye’s security platforms help in protecting business communications and resources for corporate networks, including remote employees and branch offices. FireEye is gaining customer accounts and increasing penetration of existing customers, which is driving revenue growth.
We note that cybersecurity has become a mission-critical, high-profile requirement given the growing exposure of enterprises to sophisticated cyber threats. Per MarketsandMarkets, the global cybersecurity market is expected to reach $248.3 billion by 2023, reflecting a CAGR of 10.2% through 2018 to 2023. FireEye has been making significant progress on capitalizing this opportunity, which makes us optimistic about its prospects.
FireEye’s powerful technology MVX engine, through which it delivers differentiated security offerings, is gaining strong adoption. Continuous enhancement in MVX engine’s product capabilities will further drive the company’s top-line performance.
Moreover, the company’s focus on selling more subscription-based services has helped it witness tremendous customer growth. Subscription-based services also generate higher margins for the company (approximately 80%) than the hardware-centric model.
In the last reported quarter, product, subscription and support revenues increased 7.6% year over year to $175.7 million, backed by strength in Managed Defense, stand-alone iSIGHT Threat Intelligence, Helix subscriptions and cloud e-mail. We believe that continued focus on subscription-based products and services and product upgrades will boost its top line.
Long-term earnings growth rate for Synopsys, eGain and Symantec is projected to be 10%, 30% and 7.9%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Here's Why You Should Hold on to FireEye (FEYE) Stock Now
FireEye, Inc. is benefiting from strong traction in the cybersecurity market, increased adoption of its services, growing clientele, and focus on shifting its business model to a subscription-based one.
The company surpassed the Zacks Consensus Estimate in each of the trailing four reported quarters, the average being a whopping 125%.
With expected long-term earnings per share growth rate of 16% and a market cap of $3.2 billion, investors need to consider retaining the stock in their portfolio for long-term gains.
Let’s delve deeper and analyze FireEye’s prospects.
Growth Drivers
FireEye’s security platforms help in protecting business communications and resources for corporate networks, including remote employees and branch offices. FireEye is gaining customer accounts and increasing penetration of existing customers, which is driving revenue growth.
We note that cybersecurity has become a mission-critical, high-profile requirement given the growing exposure of enterprises to sophisticated cyber threats. Per MarketsandMarkets, the global cybersecurity market is expected to reach $248.3 billion by 2023, reflecting a CAGR of 10.2% through 2018 to 2023. FireEye has been making significant progress on capitalizing this opportunity, which makes us optimistic about its prospects.
FireEye’s powerful technology MVX engine, through which it delivers differentiated security offerings, is gaining strong adoption. Continuous enhancement in MVX engine’s product capabilities will further drive the company’s top-line performance.
Moreover, the company’s focus on selling more subscription-based services has helped it witness tremendous customer growth. Subscription-based services also generate higher margins for the company (approximately 80%) than the hardware-centric model.
In the last reported quarter, product, subscription and support revenues increased 7.6% year over year to $175.7 million, backed by strength in Managed Defense, stand-alone iSIGHT Threat Intelligence, Helix subscriptions and cloud e-mail. We believe that continued focus on subscription-based products and services and product upgrades will boost its top line.
FireEye, Inc. Revenue (TTM)
FireEye, Inc. Revenue (TTM) | FireEye, Inc. Quote
Zacks Rank & Stocks to Consider
FireEye currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Computer and Technology sector are Synopsys, Inc. (SNPS - Free Report) , eGain (EGAN - Free Report) and Symantec Corporation , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Synopsys, eGain and Symantec is projected to be 10%, 30% and 7.9%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>