The firm said it initiated coverage on the network security company as it believes FireEye will be facing an increase in competition over the coming quarters.
"We believe the company is well-positioned to benefit from rapid growth in the cyber security market: however, we are concerned that increasing competition mat put pressure on the company's hyper-growth rate," JMP said.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
"The cyber-threat landscape has evolved to include more sophisticated, well-funded, and maliciously motivated actors who use a new generation of attack known as advanced persistent threats," the firm added.
"The APT market has become increasingly competitive with products from established companies gaining significant traction and an increasing number of well-funded start-ups also targeting the space," JMP noted.
Shares of FireEye are higher by 1.71% to $30.89 in pre-market trading today.
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 a few notable weaknesses, 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 363.3% in earnings (-$2.09 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 15.28% 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