FireEye Inc: Why FEYE Stock Is on Fire Right Now

FireEye stockWhy FEYE Stock Is Gaining

FireEye Inc (NASDAQ:FEYE) stock had a great showing in after-hours trading on Thursday, November 3, rising by 14% after a strong showing in its third-quarter report.

With the 12.6% jump in revenue, and billings rising 2.3% to $215.4 million in the third quarter, beating analyst expectations of $206.2 million, investors got hot on the cloud-based security provider. Billings are often seen as a good predictor of future business, making this rise a welcome addition and another boon to FEYE stock.

Moving its web, email, and malware security services from a physical box to a subscription-based model is believed to have helped FEYE stock climb. Revenue from subscriptions and services business rose 35.1% during this quarter. (Source: “FireEye revenue beats on strong demand for cloud services,” Reuters, November 3, 2016.)

FireEye also reported a net loss of $123.4 million, or $0.75 a share, on revenue of $186.4 million.


It wasn’t all roses for FireEye, however. Despite FEYE stock jumping, 250 jobs were cut from the company. (Source: “FireEye jumps 11% as cost-cutting leads to big earnings beat,” MarketWatch, November 3, 2016.)

Reuters interviewed FireEye CEO Kevin Mandia after the strong showing about what drove the company’s success. Mandia pointed to the increase in state-sponsored hacking into government institutions and emails as part of what drove this growth.

“I think Russia’s operating at its fullest scale and scope right now, and for the first time in maybe 15 years, in my opinion, we’re responding to more state actor intrusions from Russia than in China,” Mandia told Reuters.

Although these intrusions pale in comparison volume-wise to the Chinese attacks of the past, it is still pretty interesting as that all-important November 8 election day approaches. With WikiLeaks dumping more and more emails, and fear of hacking becoming an increasingly shared concern, FireEye might just be positioned at the right time to take advantage of a possible newly-formed demand in the market. After all, if we’ve learned one thing from this election cycle, it’s to be very, very careful with your emails. Even if you don’t plan on running for president any time soon.

This rise marks a welcome change for FEYE stock after prices have hovered in the sub-$100 range following a high of $53.65 last summer.