FireEye climbs as analyst initiates coverage
NEW YORK (AP) — FireEye's stock rose Monday as an analyst started coverage of the computer security software company with an "Outperform" rating, saying it's a way for investors to get into the sector as concerns about cybersecurity grow.
Gray Powell of Wells Fargo Securities said in a client note that recent data breaches at Target Corp. and Neiman Marcus have increased awareness for the security services that FireEye provides. The analyst said that FireEye Inc.'s virtual machine technology and cloud subscription service can help to detect new advanced malware and threats that often come from multiple sources — like email, files and websites — without any known signature.
In addition, Powell said that FireEye's management is highly respected and has a history of creating shareholder value. The Milpitas, Calif., company's executives include CEO Dave DeWalt, former CEO of McAfee.
Powell's initiation of coverage for FireEye comes less than a month after William Blair & Co.'s Jonathan Ho began coverage with an "Outperform" rating. Ho said at the time that FireEye's approximately $1 billion acquisition of Mandiant Corp., announced in early January, would increase its ability to stop attacks in their early stages.
Mandiant is well known for linking years of cyberattacks against U.S. companies to a secret Chinese military unit.
FireEye is scheduled to report its fourth-quarter results Tuesday after the market close.
Shares of FireEye — which went public in September at $20 a share — gained $3.93, or 5.6 percent, to $74.66 in afternoon trading.