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Cybersecurity Stocks Head-to-Head: FireEye (FEYE) vs. CyberArk (CYBR) - Stocks in the News

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FireEye ( FEYE ) and CyberArk Software ( CYBR ) are two of the biggest names in a growing cybersecurity market. As reported recently by us here at Zacks, the cybersecurity industry is growing due to increasing public demand and widely publicized security breaches (see Protect Your Portfolio with These cybersecurity stocks ).

As this market continues to grow, FireEye and CyberArk will go head-to-head to attract both customers and investors. But which of these two cybersecurity stocks is the best choice for your portfolio right now?

Cybersecurity Industry Outlook

Cybersecurity always comes into the media spotlight after high profile cyber attacks and breaches of data. Recently, the federal government's Office of Personnel Management (OPM) revealed shocking details about a significant breach that has caught the public's attention. The breach compromised over 30 years' worth of personal data and affected over 10 million current and former federal employees. The attack was blamed on faulty security by the OPM and its contractors.

As the media puts these attacks in the spotlight, consumer awareness goes up. As consumers become more concerned with the security of their personal data, more pressure is put on employers and companies to protect people's valuable information.

This is great news for companies like FireEye and CyberArk who sell products in this industry. According to a report by Cybersecurity Ventures, the industry is expected to more than double in the next several years, growing from $71 billion in 2014 to over $155 billion in 2019. But what is the difference between these two cybersecurity upstarts?

Company Overviews

FireEye, headquartered in Milpitas, California, offers web, email, file, and malware security for enterprises and governments across the globe. The company recently announced a partnership with VISA ( V ) to create tools and services to help protect against cyberattacks. The first of its kind, this partnership will provide consumers with unique protection from both the IT and merchant sides of online transactions. With share prices growing over 50% in 2015 alone, FireEye has a solid foothold in the market.

Meanwhile, CyberArk Software is an Israeli company that also focuses on protection from cyberattacks. CyberArk offers 3 product platforms that cover shared technology, account security, and sensitive information management. The company has over 1,800 worldwide clients, including 40% of the Fortune 500 and 17 of the top 20 banks. CYBR went public in September and share prices have more than doubled in that time, indicating strong investor interest in this young stock.

Here are some quick figures on both of the companies:

FireEye (FEYE) CyberArk (CYBR)
Zacks Rank #3 (Hold) #2 (Buy)
Current Quarter EPS Estimate -0.88 0.04
Yearly EPS Estimate -3.40 0.35
Average EPS Surprise 10.77% 1,225.00%
Year over Year Growth Estimate -20.02% -27.08%
Projected Sales Growth 47.73% 34.92%
2014 Net Income -$444 million $10 million

Based on these numbers, both companies are expected to see strong growth in sales, but this isn't necessarily translating into a growth in share prices. While FireEye has had a strong year to date, analysts don't expect this trend to continue, and a Zacks Rank #3 (Hold) suggests that FireEye might not stand out going forward. The company has also struggled with significant net income losses.

In contrast, a Zacks Rank #2 (Buy) for CyberArk indicates positive earnings estimate revisions for the company. The company has been able to post positive net incomes and has seen incredible success on the market since going public. Both companies have been able to beat earnings expectations in the past, but CyberArk has grown at an exceptional rate.

One thing holding CyberArk's stock back is its weak value. CYBR currently has a Forward P/E of 207.23, making it one of the more expensive stocks on the market. Right now, Zacks has given both CYBR and FEYE a grade of "F" for value in our Style Score system. This shows that these companies probably aren't great buys for value investors.

Bottom Line

For investors looking to get into a growing industry it is extremely important to pick a growing company. FireEye certainly has room for growth in the future. Their partnership with Visa was just recently announced, and we haven't seen what effects this will have on their income or sales. It is a one of a kind partnership, and is sure to shake up the market. However, current trends indicate continued positive growth for CyberArk right now. Either way, look for both of these companies to remain in the spotlight as the demand for cyber security services heats up over the next few months and years.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

FIREEYE INC (FEYE): Free Stock Analysis Report

CYBER-ARK SFTWR (CYBR): Free Stock Analysis Report

VISA INC-A (V): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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