FireEye (FEYE) Stock Closes Higher After Executives Buy Shares

FireEye (FEYE) shares close higher after CEO Dave DeWalt and CFO Michael Berry purchase stock,
By Lindsay Ingram ,

NEW YORK (TheStreet) -- Shares of FireEye (FEYE) - Get Report gained 6.1% to $23.83 on Friday after executives bought stock of the security software company.

FireEye CEO Dave DeWalt purchased a total of 22,500 shares of the company on Friday. The CEO purchased 22,200 of those shares at a price of $22.6451 a share, and the remaining 300 shares at $23.10 a share.

CFO Michael Berry also purchased 13,500 shares of FireEye on Friday. Berry bought 13,400 of those shares at $22.6766 a share, and the remaining 100 shares at $23.10 a share.

The executive's purchases come two days after the security software company's disappointing third quarter earnings report.

About 15.3 million shares of FireEye were traded during regular trading hours Friday, above the company's average trading volume of about 5.7 million shares a day.

TheStreet Ratings team rates FIREEYE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate FIREEYE INC (FEYE) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, FIREEYE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, FEYE has underperformed the S&P 500 Index, declining 17.57% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Software industry average. The net income has decreased by 14.3% when compared to the same quarter one year ago, dropping from -$116.82 million to -$133.57 million.
  • FIREEYE INC's earnings per share declined by 6.1% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FIREEYE INC reported poor results of -$3.13 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings (-$1.73 versus -$3.13).
  • Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.71 is very high and demonstrates very strong liquidity.
  • You can view the full analysis from the report here: FEYE

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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