FireEye Is On Fire Following 'Solid' Q4 Results

FireEye Inc FEYE is up more than 5 percent in after hours trading after the company announced its fourth quarter and full-year results.

"They got a billings beat, which is what they had to have," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "The story with FireEye is that they're moving a lot of their revenues to subscription-based."

At press time, Udall said that the billings increase was the largest beat he had seen.

"That's solid," he said. "I think it's good enough to make the stock work."

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Triple-Digit Growth

Cody Willard, chairman of Scutify (a financial social network), took note of FireEye's year-over-year triple-digit growth. He said the results were "better than most analysts had been modeling out."

"The problem is the guidance," Willard told Benzinga. "It's slightly under what the analysts had modeled out for next quarter."

Willard had expected FireEye to guide fairly well after securing two prominent clients: Sony Corp (ADR) SNE and Anthem Inc ANTM.

"Instead they're lower," Willard added.

Udall was a bit more accepting of the guidance, which he referred to as "okay." He said that he expected some investors have to issues with it but noted that the company is transitioning to a heavy subscription model. On that end, Udall said that the guide looks pretty good.

No Profits?

Investors must also remember that FireEye is several quarters -- if not several years -- away from profitability.

"In many ways it's still a venture capitalist kind of investment," said Willard. He added that "if" the company can actually deliver on the growth Wall Street projects, the stock should perform well over the next few years.

"But without any profitability, there's no real cushion of safety anywhere at any particular level," he said.

Full-Year Guide Is Where It's At

If investors are looking for hope within FireEye's future, they might want to focus on the long-term guidance.

"The full-year guide looks a lot better than the current quarter guide," said Udall. "It looks like the full-year gross margin numbers are going up."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.