Following Tuesday's post-close release of the company's second-quarter earnings, shares of cybersecurity name FireEye (NASDAQ:FEYE) jumped more than 18% during Wednesday's trading. On top of its rally that's taken shape since mid-March, FireEye stock is up more than 100% from its March 17 low.

That's impressive -- to the point of being intimidating. Most investors can appreciate this company's shares were hit particularly hard in February and the first half of March, but still, that's a tough act to follow.

Of all the things an investor might reasonably be worried about, though, the scope of FireEye's big rebound since March 17 isn't one of them. This stock is still an inviting one to newcomers, for the same reason it was at this time last year, the year before that, and the year before that. This company remains an impressive growth machine and continues to move deeper into the black.

Man pressing a "buy" button on a computer keyboard

Image source: Getty Images.

FireEye is doing what it's supposed to do

FireEye is in the same cybersecurity arena as rivals Palo Alto Networks (NYSE:PANW) and Fortinet (NASDAQ:FTNT). The market is currently worth more than $100 billion per year, but the still-gelling industry could be driving well in excess of $200 billion worth of annual sales within just a few years. As enterprises better understand their cyber risks, they'd better understand there's no choice but to combat them. These companies all more or less accomplish the same end-goal for their clients: defending their computer networks.

Not all of these organizations accomplish the same task the same way, though.

FireEye's big differentiator is an all-inclusive suite of cloud-based security options available in a platform called Helix. The interface brings together most of the company's offerings into one easy-to-use menu, and being cloud-based means customers enjoy perpetual access to the most updated tools and information available.

Perhaps most interesting about Helix and a couple of other lower-profile technological tools available from FireEye is that they're purchased on a subscription basis. This means the company enjoys recurring revenue from its existing customer base. Its real challenge is simply growing the number of users it serves.

To that end, FireEye's rate of annual recurring revenue reached $598 million as of the second quarter, up 8% from that same figure a year ago. For perspective, the company's total top line for last quarter rolled in at $230 million, up 6% from $218 million in the same quarter a year earlier. Not only are subscription-based sales growing faster than non-subscription revenue, recurring revenue now makes up more than half of the organization's top line. Gross margins improved too, and operating (non-GAAP) income for the recently ended quarter came in at $0.09 per share versus a loss of one cent per share in Q2 of 2019.

Those numbers extend a well-established trend.

FireEye (FEYE) is expected to grow its top and bottom lines just as it has in the recent past

Data source: Thomson Reuters Eikon. Chart by author.

Focus on the Future and Not the Past

So why was FireEye stock chopped in half between February's high and March's trough? For that matter, why hasn't this stock made any net progress since 2016? And why is it still well below its 2014 peak of $97.35, hit shortly after its 2013 IPO?

FEYE Chart

FEYE data by YCharts

As to the first question, while the February/March sell-off may have been a mistake, it was ultimately an understandable one. Corporations aren't going to abandon cybersecurity in this day and age, but it wasn't unreasonable to fear they would when the world was facing a pandemic that could have crippled the global economy. Investors unwound that mistake pretty quickly, dragging shares up from March's low.

As to the latter questions, though, it's not exactly clear why the market hasn't rewarded FireEye for its progress toward attaining fiscal viability.

Uncertainty regarding its strategy could be one worry. FireEye has built its suite of tools largely through acquisitions, which only works if the buyer can make those deals pay for themselves. The company has done so, but it hasn't always been clear it would. Even so, it's been evident for some time now that FireEye will eventually get out of the red and remain in the black. Last quarter was another layer of convincing evidence. Given the tide, analysts have fair reason to expect more of the same progress going forward, understanding digital threats never sleep, regardless of the economic backdrop.

Beyond that still-fading concern, though, it's not clear why this stock has performed so poorly over the course of the past few years.

Whatever the case, the solid second-quarter beats on sales and earnings not only prove the company's resiliency, they also bolster the bullish case with at least a few more investors. The more often FireEye does this, the closer the stock gets to breaking out of its long-term funk. Interested investors may want to let some of Wednesdays' dust settle before stepping in, but the stock is far from "too far gone." The big move since March just brings its price back to the middle of a multi-year range. The underlying story hasn't changed a bit.