Trade-Ideas LLC identified

FireEye

(

FEYE

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified FireEye as such a stock due to the following factors:

  • FEYE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.0 million.
  • FEYE has traded 105,695 shares today.
  • FEYE is up 4% today.
  • FEYE was down 5.8% yesterday.

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More details on FEYE:

FireEye, Inc. provides cybersecurity solutions for detecting, preventing, analyzing, and resolving cyber-attacks. Currently there are 10 analysts that rate FireEye a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for FireEye has been 4.9 million shares per day over the past 30 days. FireEye has a market cap of $2.8 billion and is part of the technology sector and computer software & services industry. Shares are down 25% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates FireEye as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Software industry average. The net income has decreased by 16.4% when compared to the same quarter one year ago, dropping from -$133.96 million to -$155.90 million.
  • 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.
  • Net operating cash flow has significantly decreased to -$22.52 million or 600.12% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 68.05%, 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.
  • FIREEYE INC's earnings per share declined by 11.4% 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 two years. 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 -$3.50 versus -$3.13 in the prior year. This year, the market expects an improvement in earnings (-$1.24 versus -$3.50).

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