Jim Cramer -- FireEye's Revenue Miss Will Weigh on Cyber Security Industry

FireEye missed revenue expectations and disappointed investors with its guidance. The letdown will weigh on the cyber security group Thursday, Cramer said.
By Bret Kenwell ,

Shares of FireEye (FEYE) - Get Report  plunged nearly 24% Thursday after beating on earnings per share estimates but missing analysts' revenue expectations. Worse, FireEye provided weaker-than-expected revenue guidance.

The truth of the matter is there have been fewer cyber attacks, which means less business for FireEye, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment. 

During the conference call management pointed out the connection between fewer hacks and the revenue shortfall but they reassured investors that business is bound to pick up, Cramer said. 


FEYE data by YCharts

When big companies and retailers are hacked, it makes for big headlines and drives the cyber security stocks higher, Cramer explained. 

So the lack of headline-worthy news also hurt FireEye's stock price. Shares have been under pressure for a while, down 50% over the past three months. 

Cramer said FireEye's results will likely weigh on entire cyber security sector, as seen by the exchange-traded fund that tracks it, the PureFunds ISE Cyber Security ETF (HACK) - Get Report . HACK is down 3.3% Thursday.

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.

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