Why FireEye, Inc. Shares Fell Sharply

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of cybersecurity technologist FireEye (NASDAQ: FEYE  ) plummeted 22% today after issuing a disappointing short-term outlook.

So what: The stock has plummeted in recent months on concerns over slowing growth, so today's downbeat current-quarter and full-year guidance only reinforce those worries. And while FireEye's Q1 results -- net loss of $101.2 million on a revenue spike of 161% -- managed to top estimates, softer-than-expected license performance is giving analysts some negative vibes over its competitive position going forward.

Now what: Management now sees a full-year loss of $2.10 to $2.30 per share on revenue of $405 million to $415 million, versus the consensus of a $2.03-per-share loss and revenue of $407 million. "We continued to redefine the security landscape as we executed on our strategic roadmap, integrating Mandiant's operations, introducing multiple new products, and expanding our global reach with new reseller and service provider partners," said Chairman and CEO David DeWalt. "As a result, we are a larger, more diversified company, and our security platform has never been more differentiated." More importantly, with a rock-solid balance sheet and severely beaten stock price -- now off about 70% from its 52-week highs -- FireEye's downside might be limited enough to bet on that bullishness.

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  • Report this Comment On May 07, 2014, at 7:39 PM, jason2713 wrote:

    it fell sharply because the sky was blue

  • Report this Comment On May 07, 2014, at 7:40 PM, jason2713 wrote:

    it fell because dogs bark.

    losing almost 70% of your value in 2 month span, stay far far away. Lock up expiration on the 21st of May accounting for 86% of shares. Train wreck has no bottom.

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Brian Pacampara

I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

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Related Tickers

8/28/2015 4:00 PM
FEYE $39.19 Up +0.10 +0.26%
FireEye CAPS Rating: ****