Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Is FireEye a Must-Have for CIOs?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

No one gets fired by buying IBM. Technologists used to say this phrase in the '80s for mentally justifying the premium they paid for expensive hardware. Now, 25 years later, the same could be said for FireEye (NASDAQ: FEYE  ) .

Target knew
Target's pre-Christmas data breach was designed to capture credit card information from 1,797 stores just after the swipe. This is a terrible event for a retailer, but hardly one that makes Target stand out. Hackers seem to target everybody, from three-node personal networks to the CIA. Why, then, would the company fire its CIO? It didn't make any sense until Business Week published a story about how the company was warned by FireEye that a breach had occurred, and didn't respond effectively.

Invest to keep your job
CIOs tend to turn over about every three years, which is a crazy number if you're trusting your most valuable corporate asset to somebody who's job expectancy is lower than the four-year depreciation rate on a Dell laptop. If a person takes the time to grow in an organization, and achieves such a high level of success, it stands to reason that once they are at the top, they'll cross as many t's and dot as many i's as possible to keep their position. This may make FireEye a need-to-have as opposed to a nice-to-have.

Competition for incremental dollars will be companies like Palo Alto Networks
Companies like Palo Alto Networks Inc  (NYSE: PANW  ) and Intel Corporation (NASDAQ: INTC  ) , with its McAfee suite, are considered to be competition for FireEye, and may be viewed as such by cash-strapped IT managers who have to make due with tight budgets. However, Trend Micro's focus on the desktop is less of a threat. Palo Alto, on the other hand, has been gaining share on the industry incumbents, as IDC recently ranked it in fifth place for the top security-appliance vendors.

We showed how FireEye could justify the high premium paid for Mandiant in an article on January 7. Mandiant offers the capacity to resolve the problems that FireEye detects, which is a compelling solution for personnel-stretched IT departments. At the end of the fourth quarter, FireEye only had 1,500 customers, leaving tremendous room for growth.

Quick ROI
On the most recent earnings call, FireEye guided investors to bookings of $550 million for 2014. If the customer base is 1,500, this works out to only $366,000 per customer, possibly a large budget item, but one that seems reasonable to offset a potential $17 million price tag like the one Target recently incurred.

How does the cost stack up?
In 2013, Target's IT budget was $130 million to $160 million. In hindsight, the return on investment could have been amazing... but who knew? Looking forward, though, you can bet that the CIOs of companies with revenue of more than $500 million will be thinking long and hard about how safe their customer data is. A few of them might even be considering the Net Present Value of a year of unemployment versus the cost of a year of FireEye's service.

Nine rock-solid dividend stocks
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks, as a group, handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks, in particular, are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Read/Post Comments (2) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 19, 2014, at 12:31 PM, craigkensek wrote:

    I'm still surprised that little attention has been paid to the fact that FireEye has yet to put out a press release or make available the results of their NSS Labs testing last year. The other two companies seem to have.

  • Report this Comment On March 20, 2014, at 3:47 PM, NOPx90 wrote:

    @craigkensek nice biased comment from an Ahnlab employee. No one seems to notice that FireEye was the first to catch 11 of the 13 zero day threats last year. They missed 2 because they didn't have Mac support, otherwise they would have caught the Microsoft Office for Mac and the Mac OS Java vulnerability as well. You should consider having some professionalism instead of slamming your competition. Given their real world track record it's hard to argue their efficacy.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2876715, ~/Articles/ArticleHandler.aspx, 8/29/2015 12:56:34 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

David Eller

I started contributing to the Motley Fool in 2013. I have held research positions at two investment banks and two hedge funds before trying more entrepreneurial ventures. I'm passionate about helping people find freedom in financial independence. Feel free to add comments and start a discussion. I hope to use these articles as forums to learn from you as well as share my opinion.

Today's Market

updated 15 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:00 PM
FEYE $39.19 Up +0.10 +0.26%
FireEye CAPS Rating: ****
INTC $28.42 Up +0.70 +2.53%
Intel CAPS Rating: ****
PANW $168.00 Up +0.22 +0.13%
Palo Alto Networks CAPS Rating: ***