Shares of FireEye FEYE shot higher Friday after Barclays upgraded the stock from equal weight to overweight while cutting the price target from $50 to $40.
Regarding the recent pull back, analyst Raimo Lenschow writes, “We believe the recent pullback among high valuation stocks has created a more compelling buying opportunity for long term-investors.” The note further explains that investors are currently more interested in the company slowing its growth to become profitable while investors almost entirely focused on growth when the stock IPO’d.
Barclays disclaims that the stock is not cheap at current valuation, despite its terrific growth. However, Lenschow believes management will be able to execute its long term goals, allowing the company to be one of the largest security vendors in the country.
Related: FireEye To Repeat Twitter Lock-Up?
Lenshow also commented on new offerings, “FEYE has at least four products and four services either coming to market or potentially being announced over the next few months. Management has talked about areas of interest including endpoint threat prevention, forensics and intrusion prevention services (IPS).”
The $40 price target is based on calendar year 2015 EV/Sales multiple of ten.
Shares of FireEye are up 3.13 percent to $33.30 on the upgrade. Shares have been extremely volatile over the past two weeks as the company reported disappointing earnings, had a lock up expiration, and investors have been speculating that the company would be acquired.
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