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What Drove FireEye Stock in May 2017?

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Jun. 5 2017, Updated 4:50 p.m. ET

FEYE stock rose almost 20% in May 2017

Cybersecurity (HACK) company FireEye (FEYE) stock rose 20% in May 2017. On May 2, 2017, FEYE stock rose over 14% after the company announced impressive 1Q17 results. 

FireEye reported revenues of $173.7 million in 1Q17 with EPS (earnings per share) of -$0.09, above the company’s guidance of $160 million–$166 million. FireEye expected EPS between -$0.26 and -$0.28.

In 1Q16, FireEye (FEYE) reported revenues of $168 million, a net loss of $75.1 million, or $0.47 per share. FEYE stock rose over 14% after the company announced its 1Q17 results. 

FireEye’s billings fell 18% YoY (year-over-year) to $152.4 million, and its gross margin improved from 70% in 1Q16 to 73% in 1Q17. Its non-GAAP[1. generally accepted accounting principles] operating margin also improved from -44% in 1Q16 to -7% in 1Q17.

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On May 2, 2017, FireEye’s CEO, Kevin Mandia, stated, “We made continued progress on our path to profitability in the first quarter, improving operational efficiency while managing transitions on multiple fronts.” Mandia added, “We continue to drive innovation in the security industry — leveraging our unique combination of technology, intelligence, and expertise.”

How does FireEye view 2Q17 and fiscal 2017?

FireEye (FEYE) expects its 2Q17 revenues to range between $173 million–$179 million with billings between $155 million–$175 million. The company expects to post a gross margin of 72% and a net loss of $0.10–$0.14 per share. For fiscal 2017, FireEye expects revenues between $724 million–$736 million.

Analysts expect FireEye’s revenues to rise 0.7% YoY to ~$176.2 million in 2Q17, and they expect the company’s revenues to rise 2.3% YoY to ~$730.3 million in fiscal 2017. FireEye competes in the security sector with technology heavyweights such as Cisco Systems (CSCO), Check Point Software Technologies (CHKP), Palo Alto Networks (PANW), and Fortinet (FTNT).

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