Wells Fargo reiterated an Outperform rating on FireEye, Inc (NASDAQ: FEYE) with a price target of $83-$87. Analyst Gray Powell defended the stock after the company received a low score in a NSS Labs report.
"On Thursday, FEYE shares traded off 11%. We think the bulk of the weakness was simply related to a rotation out of high growth / high multiple stocks as other hyper-growth tech names saw similar declines (WDAY -10%, PANW -8%, N -6%, vs. the Nasdaq Composite -0.9%). However, there was also an NSS Labs report on Breach Detection Systems that gave FEYE a low score relative to companies like SourceFire (NYSE: CSCO), TrendMicro, FTNT (Nasdaq: FTNT), and others," said Powell.
"We received a number of questions on the report and think it likely contributed to some weakness in FEYE shares. We read through the report, FEYE's blog post response, and also spoke with some contacts in the space about the test. Ultimately we question the validity of the results for a number of reasons and do not think the report will have any impact on FEYE's growth outlook in 2014," he continued. "FEYE's main purpose is to protect against zero day malware and unknown malware. However, the NSS test did not test against these types of threats - as it is very difficult / expensive to create this type of malware. The test was mostly against signature based malware for which a company might as well use commodity anti-virus solutions."
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Shares of FireEye, Inc closed at $54.86 yesterday. |
