NEW YORK (TheStreet) -- Shares of network security company FireEye (FEYE) are popping, up 5.22% to $50.45 on heavy volume in midday trading Friday, along with other cyber-security stocks following reports of the cyber attack on millions of U.S. federal workers.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio says, "FireEye CEO Dave DeWalt has put together the best forensic team there is to find out what goes on in a hack."
On Wednesday, FireEye and Visa announced that they will develop products and services that help merchants and card issuers detect and respond to attacks.
Late yesterday, U.S. officials revealed a data breach may have leaked personal information of roughly 4 million current and formal federal workers after hackers got into government computers, according to Reuters.
The Office of Personnel Management first discovered the cyber attack in April. The Department of Homeland Security said it concluded that the agency's data had been compromised in early May, Reuters added.
About 8.07 million shares have exchanged hands as of 12:20 p.m. ET today, compared to its average trading volume of about 6.17 million shares a day.
Milpitas, Calif.-based FireEye created a purpose-built, virtual machine-based security platform that provides real-time, dynamic threat protection across the primary threat platforms including web, email, and files in various stages of an attack life cycle.
The company provides malware protection systems as well as automated threat prevention solutions.
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 deteriorating net income and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 significantly decreased by 32.4% when compared to the same quarter one year ago, falling from -$101.21 million to -$133.96 million.
- FIREEYE INC's earnings per share declined by 15.8% 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 year. 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 -$3.13 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings (-$1.80 versus -$3.13).
- The gross profit margin for FIREEYE INC is currently very high, coming in at 79.68%. Regardless of FEYE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FEYE's net profit margin of -106.85% significantly underperformed when compared to the industry average.
- 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.
- FEYE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, FEYE has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: FEYE Ratings Report