FireEye Could Go To $45 With 'Stupendous' Q4 Results, Expert Notes
Check out Benzinga's live blog of FireEye's Q4 earnings conference call here.
FireEye Inc (NASDAQ: FEYE), the firm many enterprises turn to when their security is breached, could have another great quarter. The company will report its fourth quarter results after the market close Wednesday.
Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga that he expects the firm's results to follow the lead of other prominent tech companies.
"I think they could be like Amazon, Netflix or Twitter where they just need a good quarter, they don't need a stupendous quarter, for the stock to actually work pretty well," said Udall.
"If they have a stupendous quarter, we could be looking at a stock that gets to $45 or higher if they really, really had a strong beat."
Comparable To Twitter?
Udall speculated that FireEye is setting up similar to Twitter Inc (NYSE: TWTR) and will have a breakout quarter in Q4 or Q1. "The punishment to FireEye's stock has been way too extreme," he said.
"The company didn't get rewarded last quarter for what was actually a very good quarter. I think FireEye is one of the more important companies in the space." Ultimately, Udall believes that "everything is there for FireEye to deliver."
"They just need to deliver," he added. "I think business has been pretty good for them. Most of the companies around them reported well. I'd be pretty surprised if FireEye doesn't have a good quarter. But I think my keys are, what's the billings growth look like? What's the length of contract engagements?"
Those factors proved to be strong for FireEye in Q3, but Udall didn't think the stock was rewarded accordingly. "I think they'll basically have the same quarter as last quarter as well, where they have really strong billings, they deliver better EPS line," he said.
New Year, New Success
FireEye attracted a new client this month after Anthem Inc (NYSE: ANTM) endured a massive security breach. This came only two months after Sony Corp (ADR) (NYSE: SNE) hired FireEye subsidiary Mandiant to clean up its hacking mess.
"I think the Mandiant business [is] just a good sign that they're landing lots of good deals," said Udall.
"[Anthem] hired FireEye almost immediately. Mandiant is getting tons and tons of contracts." Udall said that if there's a huge security breach, "basically FireEye gets hired."
"In some cases FireEye may already be there with one of their products," he added. "For the deep dive forensics stuff, if there's a big problem, FireEye has become the go-to name. It was already like that five or six months ago, too. Maybe the Sony thing has helped. Maybe it has helped the reputation. I think the reputation for what the company delivers to their customers was never in question."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Latest Ratings for FEYE
|Jan 2017||Standpoint Research||Initiates Coverage On||Buy|
|Jan 2017||BMO Capital||Initiates Coverage On||Market Perform|
|Nov 2016||Goldman Sachs||Downgrades||Neutral||Sell|
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