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Comparing FireEye’s Growth with Its Peers in the Cybersecurity Space

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FireEye’s revenue growth in comparison to peers

Previously in this series, we discussed FireEye’s (FEYE) Threat Analytics Platform’s leadership in the SIEM (Security Incident and Event Management) space. FireEye, a key player in the cybersecurity space, has been challenged by low revenue growth and profitability.

In 3Q17, FireEye’s revenues rose ~2.0% to $189.6 million. Let’s see how its peers performed in the latest quarter.
cyber crime cost

In fiscal 1Q18,[1. fiscal 1Q18 ended October 31, 2017] Palo Alto Networks’ (PANW) revenues rose 27.0% to $489.0 million. In fiscal 2Q18,[2. fiscal 2Q18 ended September 29, 2017] Symantec’s (SYMC) revenues grew 25.0% to ~$1.2 billion.

In fiscal 3Q17,[3. fiscal 3Q17 ended October 28, 2017] Cisco Systems’ (CSCO) revenues rose 8.0% to $12.2 billion. In its 3Q17 results, Fortinet (FTNT) reported $374.4 million in revenues, an increase of 18.2% on a year-over-year basis.

Lower-than-expected guidance weighed on cybersecurity stocks

A majority of these companies saw their stock prices fall when they issued their recent earnings reports and provided lower-than-expected results. Symantec stock fell ~8.0% when the company announced its fiscal 1Q18 results in early November.

FireEye stock fell more than 10.0% when it announced its earnings. Palo Alto Networks, which released its earnings on November 20, 2017, also saw its stock price fall before its earnings announcement.

A common theme around this trend is not the past quarter’s earnings but the outlook for the current quarter. This outlook failed to meet analysts’ expectations, weighing on cybersecurity stocks.

The chart above, included in Accenture’s (ACN) 2017 Cost of Cybercrime Study, shows the global average cost of cybercrime in the last five years.

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