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FireEye’s Value Proposition in the Cybersecurity Space

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FireEye’s scale in the cybersecurity space

In this part of the series, we’ll look at FireEye’s (FEYE) value proposition among select US cybersecurity companies. On May 9, 2017, and as the graph below shows, Cisco Systems (CSCO) was the largest player globally by market capitalization in the security space. Cisco Systems is considered a leader in the overall security appliance market.

Symantec (SYMC), Check Point Software Technologies (CHKP), Palo Alto Networks (PANW), Barracuda Networks (CUDA), and Fortinet (FTNT) are among the other leading players in the cybersecurity space.
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Increased focus on cybersecurity bodes well for FireEye stock

As shown in the chart above, FireEye’s (FEYE) market cap was ~$2.9 billion at the end of trading on May 9, 2017, which was much lower than that of its peers. A company’s market cap is its share price divided by its number of shares outstanding.

Earlier in the series, we discussed FireEye’s recently announced fiscal 1Q17 results. Not only did the company posted better-than-expected fiscal 1Q17 earnings, but its guidance for 2Q17 and fiscal 2017 exceeded analysts’ expectations. This improved the market sentiment around the stock, which rose ~15% after the earnings announcement.

An improved outlook for the company, as well as an increased focus on cybersecurity, could provide a boost to FireEye’s market cap and stock.

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