FireEye Shares See Big Gains As Analysts Call Co. Fairly Valued

May 1, 2015

22

FireEye Shares See Big Gains As Analysts Call Co. Fairly Valued

FireEye Inc (NASDAQ: FEYE) picked up more than 6 percent Friday after the cybersecurity company's 69 percent first-quarter revenue growth exceeded expectations.

FireEye, up about 38 percent year-to-date, changed hands recently at $44.10, up 6.77 percent.

Several analysts praised FireEye's recent results, but were hard-pressed to see further upside for its shares.

"This performance appears already priced in," Morgan Stanley's Keith Weiss said Friday, while Jonathan Ruykhaver of Stephens sees "very little room" for share appreciation.

Both analysts maintained Market Perform ratings on FireEye; Ruykhaver boosted his target 4.6 percent to $45 and Weiss maintained a $37 price objective.

The company's first-quarter adjusted loss of $0.48 a share was wider than expected, and FireEye forecast a 2015 loss of between $1.75 and $1.85 a share. Wall Street predicts a $1.86 loss.

With "not yet an evident path to profitability," Cowen's Gregg Moskowitz maintained a Market Perform rating and $42 target.

FireEye's high pricing and several cheaper alternatives "could be curbing the company's growth potential," Moskowitz said.

But FBR's Daniel H. Ives said FireEye's operating margin in the recent quarter improved to a negative 56.5 percent, from negative 94.9 percent a year earlier.

"They're moving in the right direction," according to Ives, who maintains an Outperform rating and $53 target on FireEye.

Ives forecasts a 2016 negative margin for FireEye of 25.3 percent, versus a negative 44.1 percent he expects in the current year.

Fourteen analysts maintain an average Overweight rating on FireEye and $43.90 target.

Short interest accounted for about 10 percent of FireEye's public float as of mid-April and equaled about four days of trading at average volume.