In a research report issued Tuesday, Imperial Capital analyst Michael W. Kim downgraded shares of FireEye Inc (NASDAQ:FEYE) from Outperform to In-Line, while slashing the price target to $15 (from $25), which represents a slight upside potential from current levels.
Kim explained, “While we believe FEYE remains a leader in advanced threat detection, we see greater near-term challenges and business risks due to industry shifts and organizational changes. Of particular note, management is changing the company’s sales leadership (worldwide and EMEA) and plans to reduce headcount by 300-400 (about 10% of total employees), which we believe could be disruptive to sales productivity and operational execution. In our view, investors could remain on the sidelines until management delivers more consistent financial results and renewed growth from FireEye-as-a-Service (Faas), incident response services, and new products for FY17 (e.g., MVX separation, MVX detection in the cloud, endpoint real-time threat detection), while remaining on track toward achieving sustained profitability.”
As usual, we recommend taking analyst notes with a grain of salt. They are often successful in moving the stock price, but you always need to take things into perspective. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael W. Kim has a yearly average return of -43% and a 9.1% success rate. Kim is ranked #3962 out of 4105 analysts.
Out of the 30 analysts polled by TipRanks, 20 rate FireEye stock a Hold, while 10 rate the stock a Buy. With a return potential of 70.4%, the stock’s consensus target price stands at $24.43.
Shares of FireEye closed today at $14.34, down $0.08 or -0.55%.