FireEye (FEYE) Stock Surges On IDC's Market Leader Ranking

FireEye (FEYE) stock is increasing in midday trading on Wednesday after IDC issued a report showing the cyber security company's dominance in the specialized threat analysis and protection market.
By Amanda Albright ,

NEW YORK (TheStreet) -- FireEye  (FEYE) - Get Report stock is up 4.01% to $22.46 in midday trading on Wednesday, after a report showed the cyber-security company leads the specialized threat analysis and protection market.

A report issued by International Data Corp. showed that FireEye has about 37.9% of the market, which is more than seven times its nearest competitor, the company announced today. 

The specialized threat analysis and protection market was worth about $930 million in 2014, and FireEye controlled about $353 million of the market, according to IDC. 

"Advanced attackers are transforming the threat landscape, and this report recognizes the companies taking the lead in addressing this challenge," said Manish Gupta, FireEye's senior vice of products, said in a statement. "According to IDC, advanced threats are the 'new normal,' and organizations of all sizes and in all industries must realign their security budgets to protect their intellectual property and data."

Separately, 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 a number of negative factors, 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.
  • Looking at the price performance of FEYE's shares over the past 12 months, there is not much good news to report: the stock is down 32.95%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 12.9% when compared to the same quarter one year ago, dropping from -$120.03 million to -$135.53 million.
  • FIREEYE INC's earnings per share declined by 6.0% 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 (-$1.62 versus -$3.13).
  • The gross profit margin for FIREEYE INC is currently very high, coming in at 78.86%. Regardless of FEYE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FEYE's net profit margin of -81.83% significantly underperformed when compared to the industry average.
  • 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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