- Though FireEye (FEYE) opened up strongly after pre-announcing Q4 sales/billings and disclosing it's buying threat intelligence services firm iSIGHT for $200M+, shares closed down 0.5%. The cybersecurity hardware/software/services provider is down 29% in 2016, and 49% since its Nov. 4 Q3 report.
- Concerns about FireEye's 2016 commentary - in a PR quote, CEO Dave DeWalt said "we expect we can grow billings organically by 20 percent" in 2016 - appear to be weighing. Piper's Andrew Nowinski (target cut by $8 to $19) believes the Street billings growth consensus was at 28%. He now sees 26% total billings growth, after factoring $50M in expected iSIGHT billings.
- Meanwhile, FBN's Shebly Seyrafi sees FireEye's e-mail security offerings (have boosted subscription revenue) facing tough competition from a new alliance between Palo Alto Networks (PANW) and Proofpoint (PFPT). Palo Alto's WildFire malware-prevention service (competes with FireEye's malware-prevention offerings, and integrates with Palo Alto's next-gen firewalls) will be paired with Proofpoint's core Targeted Attack Protection e-mail security software to protect against e-mail and social media-based malware attacks. End-to-end network, cloud, and endpoint security is promised.
- On the bright side, reactions to the iSIGHT acquisition have been largely positive. Deutsche's Karl Keirstead: "We like this security segment and the deal rationale/economics seem reasonable." Stifel's Gul Talpaz: "In the near-term, we believe that feeding iSIGHT’s intelligence into FireEye’s existing products should improve their overall efficacy and reduce already low false-positive rates."