FireEye Has 'Eye Of The Tiger,' Wunderlich Initiates At Buy

In a report published Tuesday, Wunderlich analyst Rob Breza initiated coverage of FireEye Inc (NASDAQ: FEYE) with a Buy rating and $62 price target. The analyst believes that the company is well positioned, among the next-gen security companies, to address the needs of the "ever-changing threat landscape."

Apart from its expanding products and services portfolio, across the enterprise network and endpoint, FireEye shift in focus to providing more subscription-based offerings, as well as its leadership position in the market warrant a premium valuation.

"FireEye estimates the market it addresses to be at $30 billion, which would include: Anti-virus, Intrusion detection/prevention, managed security services, and analytics with a combined CAGR of approximately 10 percent, which is in line with the overall security industry," Breza reported.

The company will also divert some types of network traffic to improve performance, although the traffic will still need to be inspected. The advantage that FireEye offers is a virtual, machine-based platform that offers "real-time dynamic threat protection" across various stages of a cyber attack's life cycle, thereby enabling customers to identify and block the threat in real time.

"Today FireEye sells its products and services in a variety of ways including both perpetual and subscription licenses across hardware appliances, stand-alone software, cloud subscriptions, and professional services… We expect the shift to more recurring revenue," Breza added.