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FireEye Investors Respond To M&A And Guidance, But Is The Street Convinced?

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On Wednesday, FireEye Inc. (NASDAQ: FEYE) released preliminary 4Q15 earnings and announced that it will acquire iSight Partners for $200 million in cash.

"This acquisition extends FireEye's intelligence lead with an offering no one else in the industry can match," FireEye CEO David DeWalt said in a statement. "Forward-looking security organizations -- from governments to the private sector -- know threat intelligence is the key to establishing a robust security posture tuned for the threats targeting each organization."

Several Wall Street firms recently gave their opinion on FireEye following the announcements.

Citi: Walter Pritchard and James Fish rate FireEye as a Buy with a $35 price target.

“FEYE announced preliminary Q4 earnings which we view as positive, especially given significant uncertainty in the market....Mgmt guided FY16 billings to 20%+ organic with iSight incremental and positive FCF for the year...The year will be more back-end loaded, something that appears to come mostly from tougher 1H comps."

Stifel: Gur Talpaz and Christopher Speros rate FireEye as a Buy while a price target is unavailable.

“We like the acquisition as we continue to see cyber-defense evolving...In the near-term, we believe that feeding iSIGHT’s intelligence into FireEye’s existing products should improve their overall efficacy and reduce already low false-positive rates.”

JMP Securities

“We believe iSight will bolster FireEye’s position as the premier name for high-end security accounts, but we are not confident that it will enable FireEye to expand down market, which is critical for the company to sustain its long-term growth...However, while we like the acquisition...we remain concerned that it is a premium priced security solution provider that is struggling to defend its installed base…”

FBR & Co. Daniel Ives rate FireEye as Market Perform while a price target is unavailable.
“The deal is expected to be modestly accretive to 2016 operating income/cash flow, and we believe iSIGHT’s actionable threat solutions could have synergies with existing intelligence/analystics solutions...We believe investors will cheer the company’s solid billings performance.”

Barclays: Saket Kalia rates FireEye as Equal Weight and lowered their price target to $21.

“Acquisition of iSIGHT adds more threat intelligence...our billings estimates are going up given the out-performance this quarter and because we include iSIGHT.”

Summit: Srini Nandury rates FireEye as a Buy with a $35 price target.

"FEYE’s solutions, though expensive, remain the gold standard to intercept and remediate APTs...We believe the company is a great acquisition candidate to any number of players in the space.”

Currently, FireEye is trading at $15.47, up 4.03 percent.

Latest Ratings for FEYE

DateFirmActionFromTo
Jan 2017Standpoint ResearchInitiates Coverage OnBuy
Jan 2017BMO CapitalInitiates Coverage OnMarket Perform
Nov 2016Goldman SachsDowngradesNeutralSell

View More Analyst Ratings for FEYE
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas News Guidance Upgrades Price Target M&A Analyst Ratings

 

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