Analysts Mixed On FireEye After DC Event

Karl Keirstead of Deutsche Bank and Gur Talpaz of Stifel both attended FireEye's annual users' conference, dubbed the "Cyber Defense Summit," in Washington, D.C. and left the event with opposing takeaways.

Deutsche Bank: ‘Muted' Checks Overshadow Bullish Commentary

According to Keirstead, FireEye's event "skewed more government than usual" – an unsurprising fact given the D.C. location and the company having already flagged the government sector as a "bigger opportunity."

Keirstead noted that the feedback surrounding FireEye's Mandiant unit was "very bullish" and prospective customers were considering switching over from other firms, including Cisco Systems, Inc. (NASDAQ: CSCO).

Related Link: Piper Jaffray Downgrades FireEye On Intensifying Competition

In addition, many potential customers were "kicking the tires" on FireEye's new HX product (for end-point security), while the EX product (email security) didn't see much interest.

Keirstead continued that many attendees were already using FireEye's core NX product (detect/stop web-based attacks), but cited either the high cost and/or shortage of trained security personnel for spending more on FireEye's additional services and deployed Palo Alto Networks Inc (NYSE: PANW)'s cheaper WildFire service along with FireEye.

Finally, Keirstead noted that customers argued FireEye was still the market leader despite its pricing. However, the analyst's recent security checks painted a different picture as resellers said that the company's products and services (along with Mandiant) are seeing increased competition from both Palo Alto and Cisco, both of which are "catching up" to FireEye's high price point.

Bottom line, the analyst argued that his own checks "have not been bullish enough" to become constructive on the stock ahead of the company's third-quarter print on November 4.

Shares remain Hold rated with a price target lowered to $35 from a previous $44.

Stifel: FireEye's Growth ‘Firmly On Display'

Gur Talpaz of Stifel pointed out that FireEye saw more than 2,000 attendees (versus approximately 1,500 last year) from over 44 countries, and the company "successfully made its case" as to why it is a market leader and premium name.

Talpaz went on to explain that he continues to see FireEye's core solutions as "functionally superior" in their ability to detect and prevent threats other firms can't find, while also offering its clients context regarding the threats. The analyst added that the introduction of an upgraded MVX detection engine and a new version of its HX series continues to "push the company forward."

"Investors should recall that FireEye signed two five-year federal government deals last year, which we view as a likely challenge to comparable growth in the current period," Talpaz concluded. "In addition, we note the reduced breach level (relative to prior periods) likely reduces both the sense of urgency on the part of buyers as well as the large-deal pipeline for Mandiant service."

Shares remain Buy rated with an unchanged $55 price target.

Image Credit: Public Domain