Can These 2 Cybersecurity Giants Turnaround the Industry With Earnings?

Two of the biggest names in cybersecurity are set to report earnings after the markets close on Thursday. Both FireEye Inc. (NASDAQ: FEYE) and CyberArk Software Ltd. (NASDAQ: CYBR) have suffered so far in 2016, but this could be a turning point. If these companies lead the charge with solid earnings reports, we could expect to see a strong summer from the cybersecurity industry, similar to what we saw last year.

However, these stocks have to overcome a slow start to this year to put themselves back on track. FireEye’s stock is down about 22% year to date, and a whopping 60% over the past 52 weeks. CyberArk is only down 12% year to date, while over the past year the stock is down 37%.

Consensus estimates from Thomson Reuters are calling for a net loss of $0.50 per share on $171.82 million for FireEye. In the same period of last year, it reported a net loss of $0.48 per share on $125.37 million in revenue.

CyberArk has consensus estimates that are much more positive on the earnings side but lagging FireEye in terms of revenue. The consensus estimates are earnings per share of $0.16 and revenue of $43.38 million. That would compare with the $0.16 per share on $32.94 million in the year-ago period.
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Looking at the most recent short interest report, even short-sellers are backing off these two cybersecurity giants going into the summer months. FireEye saw its short interest decrease to 14.77 million shares from the previous reading of 16.19 million. CyberArk also saw its short interest fall to 1.91 million shares from the previous 2.13 million.

Finally, we have collected a few analyst calls on what direction these companies are going. For FireEye:

• Oppenheimer reiterated an Outperform rating with a $35 price target.
• Goldman Sachs initiated coverage with a Neutral rating and a $20 price target.
• Wells Fargo reiterated a Market Perform rating.

And then for CyberArk:

• Stephens initiated coverage with an Overweight rating.
• Goldman Sachs reiterated a Buy rating with a $51 price target.
• Nomura has a Buy rating.

Shares of FireEye were trading at $16.10 on Thursday, with a consensus analyst price target of $24.85 and a 52-week trading range of $11.35 to $55.33.

CyberArk was trading at $39.71. The consensus price target is $48.20, and the 52-week range is $31.50 to $76.35.