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 company Proofpoint (NASDAQ:PFPT) slumped on Wednesday after the company reported mixed first-quarter earnings. After tumbling 10% on Wednesday morning, the stock had mostly recovered by 2:15 p.m., down just 1% at that time.

So what: Proofpoint reported revenue of $57.76 million for the quarter, up 35% year-over-year and just barely higher than analyst expectations. Non-GAAP EPS came in at a loss of $0.09, a penny worse than what analysts were expecting. On a GAAP basis, EPS for the quarter was a loss of $0.56, bigger than the $0.39-per-share loss during the first quarter of 2014.

Proofpoint expects revenue for the full year to be in the range of $250 million to $252 million, representing revenue growth of about 29%. The company expects to be unprofitable on both a GAAP and non-GAAP basis during 2015, although it does expect to produce positive free cash flow for the full year.

Now what: Proofpoint's revenue growth is slowing, and the initial reaction from the market, sending the shares down as much as 10%, is likely a side effect of the company's nosebleed valuation. Proofpoint trades at about 11 times sales, a lofty figure for an unprofitable company expected to grow revenue by less than 30% this year.

There are many cybersecurity stocks trading at extremely high multiples of sales, so Proofpoint is certainly not alone on that front. But I don't see anything that really justifies this kind of valuation. Proofpoint looks like an extremely risky bet within a very hot, very overpriced industry.