FireEye Stock Continued to Rise in September 2017
FireEye stock rose 15% last month
Shares of cybersecurity (HACK) company FireEye (FEYE) rose 15.5% in September 2017 to close the month at $16.77. It’s trading 62.0% above its 52-week low of $10.35 and 5.7% below its 52-week high of $17.78. In the last 12 months, FireEye has generated returns of 15.7%. In 2017, it has risen 47.0% after falling 42.0% in 2016.
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What’s attracting investors to FireEye?
FireEye is aiming to improve several metrics and target non-GAAP (generally accepted accounting principles) operating profitability over the next fiscal year. Its product revenue has been decreasing for a while, but it has seen an increase in subscription revenue to offset the decline. In 2Q17, the increase in subscription revenue beat the decline in product revenue by $400,000. However, subscription revenue rose only 13.0% YoY (year-over-year) in 2Q17 compared to a 38.0% rise in 2016.
Revenue growth in 2Q17 was 6.0% YoY compared to 3.0% YoY in 1Q17. Investors seem to like higher revenue growth for a company that has always reported losses. FireEye’s management is confident that the company can achieve non-GAAP operating profitability by the end of 2017.
FireEye’s gross margin in 2Q17 rose marginally to 74.0%. Its operating expenses that quarter fell 24.0% YoY to $178.0 million from $235.0 million in 2Q16. It reduced its operating expenses by $100.0 million in the first six months of 2017.