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Comparing FireEye’s and Peers’ Valuation Metrics

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Market capitalization and other valuation metrics

On June 14, FireEye’s (FEYE) market capitalization was $3.3 billion, while security peers IBM (IBM), Fortinet (FTNT), and Palo Alto Networks (PANW) had market caps of $134.4 billion, $10.9 billion, and $19.8 billion, respectively.

FireEye was trading at a forward EV[1.enterprise value]-to-EBITDA multiple of ~32.0x on June 14, while IBM, Fortinet, and Palo Alto had forward EV-to-EBITDA multiples of ~8.9x, ~23.3x, and ~33.1x, respectively, as shown in the graph below. FireEye’s forward price-to-sales multiple was ~4.0x that day, while IBM’s, Fortinet’s, and Palo Alto’s multiples were ~1.7x, ~6.3x, and ~8.8x, respectively.

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Bollinger Band

FireEye stock closed June 14 at $17.35, near its lower Bollinger Band of $16.30, indicating the stock is oversold—investors may interpret this as meaning “buy.”

Short interest ratio and stock return

On June 14, FireEye’s short interest as a percentage of shares outstanding (or short interest ratio) was ~4.9%. Generally, a short interest ratio above 40% suggests an impending stock price decline. Whereas FireEye stock has risen 15.7% in the last year, it has fallen 1.4% in the last month and 0.6% in the last five days.

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