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					                                    Robert DeFrancesco’s
                           Tech-Stock Prospector

September 24, 2013

Momentum Alert: FireEye (FEYE) IPO Surges 87%
It's funny how Palo Alto Networks (PANW, $46.74) was considered the hot, pricey
networking security stock. That is, until the FireEye (FEYE, $37.45) IPO came along
last week.

FireEye priced at $20, opened at $40.30 and traded to a first-day high of $44.89. The
shares are currently up 87% from the IPO price, but off 7% from the opening price.

FireEye’s current valuation actually makes Palo Alto look cheap....

*FireEye (FEYE) market cap: $4.3 billion

*Palo Alto Networks (PANW) market cap: $3.3 billion

I find it very interesting that FireEye sports a higher market cap than Palo Alto. Let's
not forget Palo Alto’s more robust portfolio includes the WildFire APT solution,
which competes directly against FireEye.

For 2013, FireEye will do revenue of roughly $150 million; that's 80% growth year
over year.

Palo Alto’s fiscal 2014 (July) consensus revenue estimate of $545.3 million indicates
growth of only 38%.

FireEye is growing 2.1x faster than Palo Alto. Fair enough.

But FEYE trades at 28.6x the forward revenue estimate, vs. Palo Alto at 6x.

Discover the most promising cybersecurity stocks. Download the September 2013
issue of Tech-Stock Prospector to your Amazon Kindle or Kindle for iPad/iPhone
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The FEYE price-to-sales valuation = 4.7x that of PANW, more than double the
growth-rate difference between the two companies.
+Note: We excluded cash & investments on the balance sheet of $437 million at Palo
Alto and $333 million (post IPO) at FireEye.


Read the September 2013 issue of Tech-Stock Prospector on your Amazon Kindle
or Kindle for iPad/iPhone reading app.

Here are some of the topics covered in the latest issue:

*Buyers rush into recent cloud-software IPOs
*Why ServiceNow was able to raise guidance yet again
*Workday causing major disruption for legacy ERP vendors
*F5 Networks looks to security to add growth in 2014
*Fortinet in Q2 attracted some savvy money managers
*Imperva emerging as a hot vendor in datacenter security
*Proofpoint brings Big Data techniques to cybersecurity
*FireEye getting IPO buzz in the security space
*Infoblox builds out its DNS firewall business
*Splunk expands its portfolio of machine-data solutions
*The outlook brightens for Facebook
*New growth drivers at Intel
* steps up growth, confounds the critics
*Could privately held SugarCRM disrupt Salesforce’s growth?
*Tech Focus: Rally Software stays agile
*Why some big investors like Akamai Technologies
*Deal Report: Rocket Fuel IPO

Order the September 2013 issue of TSP here:

Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20
years of experience covering the tech sector. He is a former senior writer with
Louis Rukeyser’s Wall Street., launched in 2003, is an investment-research service
focused primarily on the networking, storage, security, wireless and software
sectors. Annual subscription: $350.

For more information or to place an order, call 800-392-0998.