NEW YORK (TheStreet) -- Shares of FireEye Inc. (FEYE) are up 3.17% to $31.59 in morning trading Monday after JPMorgan Chase added the company to its "U.S. Equity Analyst Focus List" as a "growth name" and maintained its "overweight" rating and price target of $54.
The negative reaction to third-quarter earnings provides an opportunity for investors interested in the IT company, analysts said. The company is known for its FireEye platform, a virtual machine-based security platform that provides real-time protection to enterprises and governments against cyber-attacks.
"FireEye growth continues and leverage is kicking in. The stock had a negative reaction to the September quarter earnings that we believe provides an opportunity for investors," analysts said.
"The outlook for growth we believe is bright, and the new attitude focused on balancing operating leverage with that growth to drive the company towards profitability is likely to be well received by the market in coming quarters," the firm added.
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 some concerns, 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 feeble growth in its earnings per share and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FIREEYE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. For the next year, the market is expecting a contraction of 362.2% in earnings (-$2.08 versus -$0.45).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 135.7% when compared to the same quarter one year ago, falling from -$50.93 million to -$120.03 million.
- The share price of FIREEYE INC has not done very well: it is down 24.70% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter.
- 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.
- The gross profit margin for FIREEYE INC is currently very high, coming in at 82.47%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -105.09% is in-line with the industry average.
- You can view the full analysis from the report here: FEYE Ratings Report