Why Analysts Feel Blind-Sided by FireEye
FireEye reported its most recent earnings results on Thursday, and it was not pretty. Analysts took this as an opportunity to weigh in on the stock.
[cnxvideo id=”655225″ placement=”ros”]FireEye Inc. (NASDAQ: FEYE) reported its most recent earnings results after the markets closed on Thursday, and it was not pretty. After the report, shares hit a new all-time low for the stock, despite actually posting gains until Thursday’s report. Analysts took this an opportunity to weigh in on the stock.
24/7 Wall St. has included some highlights from the earnings report, as well as what a few key analysts said after the fact.
The company posted a net loss of $0.03 per share and $184.7 million in revenue. Consensus estimates from Thomson Reuters that called for a net loss of $0.16 per share and $191 million in revenue.
Billings of $221.8 million were down 14% from the report a year earlier, and the non-GAAP gross margin of 74% is down from 75%. The non-GAAP operating margin of −1% was versus −28% a year earlier.
[nativounit]
For the first quarter of 2017, FireEye currently expects total revenues of $160 million to $166 million, with billings in the range of $130 million to $150 million. It also sees an adjusted net loss per share of $0.26 to $0.28 and cash flow from operations of −$30 million to −$40 million. Analysts were looking for a net loss of $0.24 per share and $176.6 million in revenue.
Merrill Lynch reiterated a Neutral rating. The firm further commented:
Weak results and guidance, CFO leaving, but some light at end of the tunnel. … FEYE reported weak 4Q results, with billings/revenue of $221.8mn/$184.7mn versus our $240mn/$193.8mn estimates; CFO departing. Guidance for 1Q17 was also weak, with mgmt. expecting roughly $140mn in billings, down 25% YoY, and well below our $191mn. Positively, mgmt. guided for YoY organic growth in 2H and expects to reach positive op. margins by 4Q17.
A few other analysts weighed in on FireEye as well:
- Deutsche Bank lowered its price target to $13 from $15.
- BMO has a Market Perform rating and lowered its target to $11 from $13.
- Stifel cut its price target to $17 from $20.
- UBS lowered its price target to $13 from $14.
- Citigroup lowered its price target from $15 to $12.
- Oppenheimer has an Outperform rating but lowered its target to $23 from $28.
- Evercore ISI slashed its price target to $14 from $26.
- Goldman Sachs lowered its price target to $10 from $11.
- Morgan Stanley lowered its price target from $15 to $11.
- Cowen has a Market Perform rating and lowered its target to $13 from $15.
Shares of FireEye closed Friday at $10.93, with a consensus analyst price target of $16.58 and a 52-week trading range of $10.60 to $19.63.
[wallst_email_signup]
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
