FireEye (FEYE) PT Lowered at Wells Fargo; Analyst Remains Confident in Long Term Forecast
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Wells Fargo maintained an Outperform rating on FireEye, Inc (NASDAQ: FEYE) but lowered its price target to $44-$47 (from $83-$87).
Analyst Gray Powell said, "FEYE reported strong Q1 results with a 14% beat on billings, 3% beat on revenues, and better-than-expected operating loss. Q2 billings and revenue guidance was also better than expected. If there was one thing for investors to pick at, it was product revenues which came in below ests. However, the softness was more than made up for on the subscription side."
"FEYE also increased 2014 billings guidance by $10MM or 2% and revenues by $5MM or 1%. The company maintained the bulk of opex guidance but now expects 400 bps higher R&D. Overall, we thought the quarter as very good but in this market, our sense is that investors needed more upside on the outlook. Our revenue ests are essentially unchanged but we reduce our 2014/2015 EPS ests to a loss of $2.28/$1.72 from a loss of $2.13/$1.30 previously. We remain confident in our long-term forecast (which is mostly unchanged and calls for 50%+ annual revenue growth for the next 3 years) and the disruptive nature of FEYE’s business model. However, we reduce our valuation range to reflect the recent compression in multiples of high growth stocks. Our new valuation range is $44-47/share down from $83-87/share, previously. We continue to rate FEYE Outperform," he added.
Shares of FireEye, Inc closed at $37.13 yesterday.
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