FireEye Gets Cold Reception On Weaker Billings, CFO Departure

Shares of FireEye Inc (NASDAQ: FEYE) were hammered last week following weak billings and tepid first quarter forecast, driven by contract delays, lower sales capacity and leadership transition.

Notwithstanding lower-than-expected fourth quarter revenue and billings, the cybersecurity company’s first quarter outlook suggested continued headwinds, particularly from faster declines in appliance sales.

Michael Kim of Imperial Capital maintained his In-Line rating on shares, but cut the price target by $3 to $12.

“We look for stronger turnaround progress and improved sales execution on the company’s new cloud-based solutions (e.g., Cloud MVX, Cloud HX) and Helix platform, as well as greater channel leverage under new sales leadership,” Kim wrote in a note.

Kim says investors should remain on the sidelines until FireEye delivers consistent financial results and renewed billings growth.

The analyst expects only minimal disruption from the departure of CFO Mike Berry.

Meanwhile, Kim looks for greater channel leverage and expansion into mid-market customers, and anticipates improved billings contribution from the company’s Helix platform.

“We look for potential upside in the endpoint market with Cloud HX (endpoint detection), iSight (threat intelligence), and MVX Smart Grid (private cloud version of MVX),” Kim added.

At last check, shares of FireEye were marginally up 0.37 percent to $10.97.