Is FireEye Stock Trading at an Attractive Valuation?



Stock returns

FireEye (FEYE) stock has been very volatile in the last five years. Slowing revenue growth amid competition from cybersecurity giants has sent the stock spiraling downwards from around $55 in June 2015 to its current price of $16.60. FireEye stock (FEYE) has gained just over 3.5% since the start of April 2019. The stock has underperformed the market and has risen just 2.4% this year.

FireEye stock has risen at a CAGR (compound annual growth rate) of 8.5% in the last three years. However, it has declined by 12% annually in the last five years. FireEye’s stock is currently trading at $16.6, which is 17% above its 52-week low of $14.20 and 19% below its 52-week high of $20.61.

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Is FireEye stock trading at an attractive valuation?

FireEye is trading at a forward PE multiple of 87.76x for 2019. In comparison, the company’s earnings are estimated to rise by 137.5% in 2019 and then gain 63% in 2020, which indicates that the stock is undervalued at current prices.

Its earnings are estimated to grow at a CAGR of 78% in the next five years while sales might rise by just 7% annually over the next three years.

Out of 29 analysts covering FireEye, 11 recommend a “buy” and 17 recommend a “hold.” There is one “sell” recommendation. The average 12-month price target for FireEye is $20, indicating the stock is trading at a discount of 20% to average estimates.


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