Market Overview

Don't Mind FireEye's CFO Departure, Here's Why The Stock Is Still A Buy

Don't Mind FireEye's CFO Departure, Here's Why The Stock Is Still A Buy
FireEye to Announce Q4, FY 2013 Results on February 11, 2014, After the Market Close

Shares of FireEye Inc (NASDAQ: FEYE) have drifted lower after reporting quarterly earnings.

FireEye's encouraging numbers might have overshadowed the company's earnings beat, but analysts aren't fazed.

Wedbush: CFO Departure ‘Takes Off Some Shine,' Still A Buy

Steve Koening of Wedbush commented in a note that he was "surprised" by Sheridan's announcement, and "not as concerned" about the deceleration in product revenue, which was expected.

Related Link: FireEye Investors Distracted By CFO Departure Despite Earnings Beat

Koening said that FireEye's guidance was "encouraging" as the company expects to be roughly breakeven on a cash flow basis in 2015, two years ahead of its recent guidance which was communicated during the most recent analyst day.

Bottom line, the analyst concluded that his checks indicate that the market views FireEye's advanced threat technology as "superior" in the network and web category.

Shares remain Outperform rated with an unchanged $63 price target.

Wunderlich: CFO Departure A ‘Natural Progression'

Rob Breza of Wunderlich commented in a note that Sheridan's departure is a "negative" for FireEye, although it could also be seen as a "natural progression" for the company "as it rises to prominence."

Despite the "negative" CFO announcement, Breza remains bullish on the company after its second-quarter results were above consensus estimates across all metrics, increased its fiscal 2015 guidance, and accelerated the timeline to become cash flow breakeven.

Finally, Breza stated that the premium in FireEye's stock is "supported" by its strong performance and, more importantly, the fact that deferred revenue rose 77 percent year-over-year which outpaced revenue growth of 56 percent over the same time period.

Shares remain Buy rated with an unchanged $62 price target.

FBR: CFO Departure A ‘Non Event'

Finally, Daniel Ives of FBR commented in a note that Sheridan's departure is a "non-event" as the company's CEO David DeWalt is the "face of FireEye" on the Street.

Ives also commented on the company's results, noting that while some investors would have hoped for a bigger "beat and raise," the company's quarter guidance marks another step forward for its "evolving" business model and massive investments for growth.

Bottom line, Ives suggested that investors' "knee-jerk" reaction to the product revenue number could be "overdone," the company nevertheless still remains a "prove me" story.

Shares remain Outperform rated with a $53 price target.

Posted-In: Daniel Ives David DeWaltAnalyst Color Long Ideas Top Stories Analyst Ratings Movers Trading Ideas Best of Benzinga


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