Buy Cybersecurity Basket on FireEye (FEYE) Related Weakness, FBR Capital Says (CHKP) (PANW) (PFPT)

FBR Capital analyst is out defending other cybersecurities stocks on weakness related to poor results and outlook from FireEye (NASDAQ: FEYE).

"It's FireEye Not Cybersecurity Weakness," analyst Dan Ives said. They would be buyers of the cybersecurity basket, with Check Point Software Technology (NASDAQ: CHKP), Palo Alto Networks (NYSE: PANW), Proofpoint (NASDAQ: PFPT) front and center.

"In light of FireEye's disaster quarter/guidance last night, we are seeing softness across the sector this morning as investors "sell first and ask questions later." The big worry is around FireEye's pronounced weakness vs. Street expectations and if this speaks to softness in the overall cybersecurity sector. Importantly, we note that nearly every major cybersecurity player (Check Point, Imperva, Proofpoint, Palo Alto, Fortinet) recently has delivered strong results across the board with a healthy outlook. With DeWalt blaming FireEye's weakness on non-company-specific issues, macro, weaker spending trends, Europe, and "head scratching" better China-U.S. relations, which is causing less threats, investors are taking his words and running for the exits in a panic. We continue to strongly believe that FireEye's issues are much more company-specific as DeWalt & Co. are dealing with a plethora of execution/product headaches in the field, which are major overhangs on the FireEye story heading into 2016. We continue to see white-hot cybersecurity spending, which we view as a 30%+ growth area in a 2%–3% overall IT landscape as the threat landscape escalates. We would be strong buyers of the cybersecurity basket, with PANW, PFPT, and CHKP front and center.

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