For FireEye to see gains, it must maintain its share of the standalone APT, or Advanced Persistent Threat market, which is now at 46% through 2019, analyst Walter Pritchard said.
When customers use standalone APT, this helps the company, but that doesn't fall in line with historical trends, Bloomberg noted.
"We haven't seen a market grow to the size we predict APT will become ($3.6 billion in 2019) with one vendor having this sort of share," Pritchard added.
FireEye provides cybersecurity solutions for detecting, preventing, and resolving cyber-attacks.
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 several 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 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