Wedbush Analyst Explains Why FireEye And Proofpoint Will Continue To Move Higher

Wedbush Analyst, Steve Koenig and Jae Cho, initiated coverage on FireEye Inc FEYE and Proofpoint Inc PFPT on Thursday with Outperform rating for both and also added Proofpoint to Wedbush's Best Ideas list.

Koenig was on CNBC recently to discuss why he is bullish on FireEye when the company is up almost 60 percent this year alone.

Well Positioned

"We think, there is plenty of upside here on 12-month, 24-month basis and potentially beyond," Koenig began. "What we see is that the demand for cybersecurity solutions that can handle these advance threats -- that are growing in severity and growing in number -- that demand is growing every day. And we think FireEye is extremely well positioned in this space as well as I will mention another company we initiated Outperform today too - Proofpoint."

Demand Environment Will Support Sustained Growth

On why he thinks FireEye will continue to outperform, Koenig said, "Well, we look at our ratings really on a 12-month basis. We are not trying to make a trading call for the next month or so and if you look at the growth rate of these stocks and their progression towards being profitable, some of them spend very large amounts right now as they are in this hyper-growth phase, but we look at the growth rate combined with that progression."

"We see plenty of upside in our long-term discounted cash flow analysis. And, we think, the demand environment is going to support sustained growth out of FireEye and some of the other next generation security leaders for months quarters and years to come," Koenig concluded.