NEW YORK (TheStreet) -- Shares of FireEye (FEYE) were gaining 4.8% to $32.39 Friday, ahead of an official announcement linking North Korea to the Sony (SNE) hacks that led to the cancellation of The Interview, and continuing its gains from Thursday.
The U.S. Justice Department and the FBI are expected to announce that the hacks can be linked to North Korea, according to Bloomberg. The Obama administration is reportedly considering a "proportional response" to the hack, though it is wary the attack may have been intended to provoke a large-scale reaction.
The Interview is a comedy starring James Franco and Star Rogen as journalists who are asked by the CIA to assassinate Kim Jung-Un after securing an interview with the North Korean ruler. The film was scheduled for a Dec. 25 release, but was cancelled following threats from the hackers who leaked information from Sony's computer network.
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Sony recently hired FireEye's Mandiant forensics unit to handle the fall out from the hack, according to Reuters.
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 22.04% 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