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FireEye Is Trading above Analysts’ Median Price Target

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FireEye stock rises 8.3%

Cybersecurity (HACK) company FireEye (FEYE) rose over 8% last week, to close at $17.34. The stock is now trading 67% above its 52-week low of $10.35, and it touched an all-time high of $17.34 on September 15. The stock has risen 23% in the last 12 months and almost 25% in the last month. In comparison, the stock fell ~40% in calendar 2016.

This upward rally for FireEye has meant that the stock is now trading above the 12-month analyst median target. Of the 29 analysts tracking FireEye, ten gave the stock a “buy” recommendation, and 18 analysts recommended “hold.” There was one “sell” recommendation. Analysts’ consensus price target for FireEye stock is $16.95, with a median target estimate of $16.50. FireEye is trading at a 5% premium to the median analyst estimate.

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Subscription and service revenue rose 15% in 2Q17

FireEye is now transitioning to a service-based business model and is focused on selling services on a subscription basis., which should generate a recurring revenue stream for FireEye. In 2Q17, FireEye generated revenue of $154.3 million in its subscription and services business, a rise of 15% YoY (year-over-year). This shift in the company’s business model improved its services gross margin by four percentage points in 2Q17, bringing its margin to 66%.

FireEye expects revenue of $183 million–$189 million in 3Q17, compared with revenue of $186.4 million in 3Q16. In fiscal 2017, FireEye expects revenue of $734 million–$746 million, up from its revenue of $714.1 million in 2016.

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