NEW YORK (The Street) -- Global cybersecurity company FireEye (FEYE) received a massive boost to its stock price on Friday after it acquired forensics specialist company Mandiant Corp. for $1 billion.
FEYE surged more than 30% on Friday, boosting shares to an all-time high. The company's stock has more than doubled since it debuted on the market in September. FireEye had also increased its fourth-quarter revenue estimates on Thursday. Goldman Sachs also increased its price target on FireEye from $40 to $45.
FBR Capital Markets analyst Daniel Ives wrote in a note that FireEye's purchase of Mandiant is a sign of more consolidation within the cybersecurity sector. "This deal speaks to our thesis around massive consolidation in the security landscape for 2014, with names such as Fortinet Inc. (FTNT) and Proofpoint Inc. (PFPT) as prime acquisition candidates," Ives wrote.
Some analysts have noted that larger companies such as IBM (IBM), Hewlett Packard (HPQ) and Symantec (SYMC) could start to purchase smaller security companies as the cost of cybersecurity continues to increase. According to Reuters, Cisco Systems Inc. (CSCO) said in July that it would purchase cybersecurity company Sourcefire Inc. for $2.7 billion.