William Blair analyst Jonathan Ho weighed in with a few insights on FireEye Inc (NASDAQ:FEYE), after attending the company’s analyst day in San Francisco, where the key points of discussion were focused on the company’s path to reaching its long-term operating model and its significant growth opportunity as a next-generation platform play in the cybersecurity market.
Ho wrote, “We came away incrementally positive based on our view that FireEye has a clear plan for achieving profitability and showing steady operating margin leverage over the next three to five years. At the same time, we believe investors need to trust that it will be rational and prudent in spending to take advantage of a significant greenfield opportunity in both the high-end enterprise and emerging opportunities for its core solutions.”
“We continue to be impressed by the high level of credibility that Mandiant adds to the story given the unique positioning the company has based on its selection as an incident response partner in nearly every major breach that has taken place. By leveraging the context and attribution associated with these attacks, we believe FireEye can offer compelling insight for customers looking to better understand who is attacking their systems, what data they may be after, and what methodologies they are likely to employ”, the analyst added.
Bottom line: “we maintain our view that 2015 will be largely a transition year for the company, as it revises its marketing and product strategy to address the newer sectors of the market it is targeting. We believe 2016 will provide improved results and additional data points to more clearly assess its strategy.”
The analyst maintained an Outperform rating on the stock, without suggesting a price target.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jonathan Ho has a total average return of 19.4% and a 75.0% success rate. Ho has a -0.3% average return when recommending FEYE, and is ranked #540 out of 3610 analysts.
Out of the 22 analysts polled by TipRanks, 13 rate FireEye stock a Buy, while 9 rate the stock a Hold. With a potential downside of 11.33%, the stock’s 12-month consensus target price stands at $45.25.