Morgan Stanley On FireEye: 'Go Big Or Go Home'

In a report published Friday, Morgan Stanley analysts maintained an Equal-Weight rating on

, with a price target of $37, as the company is "executing well in a robust Q1 Security environment." In the report Morgan Stanley noted, "FireEye looks to be successfully tying together a broadening set of products and services to drive big deals in its core Fortune 2000 customer base - 28 deals over $1M represent a 100% YoY increase. Incident response services (>100 in the quarter) lead to follow-on product sales in over 90% of engagements, and FireEye was able to attach the FireEye as a Service managed service offering in ⅓ of those deals over $1M." The company generated more than 50 percent billing growth in 1Q15, representing the first clean y/y comp since the Mandiant acquisition. This pushed operating cash flow to ($3.2M), significantly better well than the consensus expectations of ($16M). "While a deceleration in new customer adds (up just 13% YoY) may invoke some investors concern around FireEye's ability to address a broader (mid-market) market opportunity – we see plenty opportunity for a broadening security platform in the enterprise," the analysts said. FireEye again generated strong growth in Q1, with total billings growth of 53 percent y/y and product subscription billings growth of 62 percent y/y. FireEye raised its FY15 billings guidance by $20M to $825-835M, representing ~41 percent y/y growth at the mid-point. The company also raised its FY15 revenue outlook by $10M.