FireEye, Inc. (NASDAQ:FEYE) just won a supporter. On March 20, Merrill Lynch analysts at Bank of America Corporation (NYSE:BAC) decided the bearishness, along with the shorting volumes (at 16.7 percent float), was excessive. Setting an $18 price target, this bullish view is hard to accept. The stock is on a steady downtrend, with bears holding a 16.73 percent short float on the stock. Still, having Goldman Sachs upgrade the stock to a ‘Buy,’ up from a ‘Sell,’ does not hurt.
Goldman thinks revenue and billings will improve. The Helix product will drive higher recurring revenue. For investors, the small bump in the share price is little comfort. Debt/Equity, at nearly 0.90 times and the stock at 3 times sales does not make this stock a value play.
Until the sales team proves itself, FireEye’s great products are not going to sell itself. The exodus of talented executive staff, including the CEO and CFO. Executive Chairman David Dewalt, previously the CEO from April 2012, left in February. The CFO, David DeWalt, resigned on January 29.
FEYE did report a turnaround two quarters ago but that followed with disappointing results afterward. The lack of strong leadership suggests FireEye will underperform. Will Cisco Systems (CSCO) or HP Enterprise (HPE) buy FireEye? It is unlikely but that will not stop investors from hoping.
