Shares of cybersecurity company FireEye (FEYE) - Get Reportare a bargain, down nearly 13%, following the company's fourth-quarter revenue miss this month and the departures of the company's chairman and chief financial officer.

Recognized for its cybersecurity platform that detects threats before they infiltrate a company's network perimeter, FireEye trades at a nearly 69% discount to its initial public offering price of $36 in September 2013.

This is a good opportunity for investors to get into the stock and await gains once the dust settles after the company's disappointing quarter.

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There is a bullish argument for FireEye.

Despite facing competition from Cisco Systems (CSCO) - Get Report and Microsoft's (MSFT) - Get Report bundled cybersecurity offers, FireEye posted a quarterly loss of 3 cents a share, though analysts expected a loss of 18 cents a share. That was a narrower loss than the 36 cents a share one reported a year earlier.

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Trading at a market value of $1.9 billion, FireEye's implied $714 million sales last year gives it a price-sales ratio of 2.34 times, which makes it a bargain, compared with its security systems peers. Rivals Check Point Software Technologies (CHKP) - Get Report  (9.63 times), CyberArkSoftware (CYBR) - Get Report(7.83 times), Fortinet (FTNT) - Get Report (more than 5.13 times), Imperva (IMPV) - Get Report (5.41 times), Palo Alto Networks (PANW) - Get Report (9.31 times) and Proofpoint (PFPT) - Get Report (9.4 times) are all more expensive.

Investors can expect significant upside from FireEye's stock if they buy at this level. The truth is that analysts may have over-estimated the uncertainty in the stock. This is a software company with gross margins of more than 60%. Granted, there has been conjecture about the cause of the management revolving door, but this should be just temporary.

FireEye's financial situation is robust. The company has more than $900 million that could easily address its $742 million debt. Often, FireEye has had to contend with issues related to its lack of meaningful profitability. However, this is a common occurrence in this sector. Fortinet, with $1 billion in sales, churned out a mere $8 million in profits in 2015.

The company's profit margin is in fact poorer than that of CyberArk Software. Barracuda Networks (CUDA) and Palo Alto Networks also both posted four consecutive years of losses from 2013 to 2016.

The future seems stable for FireEye. The company has downsized operations over the past few quarters and is working toward a smarter cost structure. For software giants looking at cybersecurity acquisitions, FireEye is an excellent acquisition target at this price. Retail investors should consider buying FireEye shares, given the likely possibility of strong returns.


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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.