FireEye cuts full-year revenue forecast, shares plunge

The company defines billings as revenue recognized in a quarter plus the change in deferred revenue and is a key indicator of the company’s health. However revenue of $165.6 million was below the $167.1 consensus estimate.

The company beat on earnings – it lost less money than expected – and was slightly ahead on revenue estimates.

Update: “The new releases of our MVX engine and our HX endpoint platform last month, together with the partnerships we announced during the quarter, further strengthened our ability to detect, prevent and contain advanced threats”, DeWalt said of partnerships in the report.

Billings in the quarter came in at $210.6 million, below guidance of $225 million to $230 million.

It also lowered revenue projections for the coming year to $620 to $628 million, down from $630 to $645 million. The same period from the previous year had a net loss of $0.51 per share on $114.21 million in revenue.

In spite of the sharp sell-off in the last six months, analysts are still bullish on the stock, primarily because of the increasing cyber attacks and overwhelming demand for cybersecurity software. We believe this was due to a combination of macroeconomic factors, as well as the growing pains of a new organization. The cut in outlook comes after the company had raised it for the second time in July. The rating is an average of the various different ratings given by analysts and brokers to Fireeye Incorporated, and then averaged into one rating by a team of analysts at Zacks in Chicago, Illinois.

For the fourth quarter, FireEye said it expects to lose beteen 36 and 38 cents a share, better than the 40 cent per-share loss analysts are expecting.

This momentary step, at least in the right direction, could fuel a jump in buying FEYE stock and therefore its price. The stock’s 50-day moving average is $31.43 and its 200-day moving average is $41.37.

Among the analysts, the highest EPS was $-0.74 and the lowest was $-0.82.

Locally, FireEye operates via cyber forensics specialists, Alexandria, Va.-based Mandiant, which it acquired in 2014 for roughly $1 billion, according to The Wall Street Journal. Koenig has a success rate of 48.9% and is ranked #1174 out of 3824 analysts, while Ruykhaver has a success rate of 50% and is ranked #1049. The 12-month average price target assigned to the stock is $35.25, which implies an upside of 20.0% from current levels. These highly sophisticated cyber attacks easily circumvent traditional signature-based defenses, such as next-generation firewalls, IPS, anti-virus, and gateways.