Bank of America seems to back that up, saying that FireEye’s threat intelligence is the most advanced offering out there. From the note:
“FireEye’s core value proposition is centered around having some of the most advanced threat intelligence that lends its value to three areas of innovation: dealing with network threats, strong position in endpoint protection and above all is the value of analytics and threat management.”
The Cloud MVX and MVX Smart Grid enhances endpoint security for customers, FireEye Helix unifies the security experience for organizations. By offering a lower cost of ownership and cutting operational expenses for customers, Helix may reverse FEYE’s weakening business.
BofA lists “New products: cloud MVX, Smart grid, Helix, enhancements to FireEye-as-a-Service and the next gen endpoints” as one of its bullish arguments.
Adobe Systems Incorporated (NASDAQ:ADBE) and Microsoft Corporation (NASDAQ:MSFT) are great examples of companies moving from out-of-the-box software sales and towards cloud subscriptions. Revenue growth is slow at first, but when it picks up, profitability soars. Radcom Ltd. (NASDAQ:RDCM), a supplier of quality assurance solutions for the telecom industry, also moved towards a subscription model with great success.
Bottom Line on FEYE Stock
Last month, rumors that Symantec Corporation (NASDAQ:SYMC) would buy FireEye proved short-lived. Symantec is already absorbing Bluecoat Systems. It does not need the operational risks related to adding FEYE’s cybersecurity solution to its suite of products.
Still, FireEye does offer detection capabilities. Even if it’s not a right match for Symantec, though, it’s priced cheaply enough that it could be easily ingested by many conglomerate tech stocks.
FireEye’s mini-rallies hold some truth: The market views the company’s potential are still unrealized. A buyout would unlock the value of the company.
Better yet, having a stabilized sales team with lower turnover and developing new cloud-based products will reverse the downtrend in its stock.
FEYE stock is a buy, though the real upside potential (70% or not) could take a bit to reach.
As of this writing, Chris Lau did not hold a position in any of the aforementioned securities.