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On Monday, FireEye Inc. (Nasdaq: FEYE) stock soared more than 7% on news that cybersecurity competitor Palo Alto Networks Inc. (NYSE: PANW) hit record-breaking Q2 2014 earnings numbers earlier this morning.
"Enterprises around the world are accelerating their investments in security to enable them to improve their business and protect them against the risks stemming from cyber attacks," Palo Alto Networks president and Chief Executive Officer Mark McLaughlin said at earnings release today.
The boost FEYE stock enjoyed today puts it up a whopping 76.54% since the New Year. It's increased 100.65% since December, and 113.86% since going public in September.
And this is just the beginning of FireEye's profitability.
Cyber attacks on companies increased 42% in 2012 from a year before, and businesses are projected to spend $67 billion on information security this year, according to tech research firm Gartner. Security spending will increase by around 39%, to $93 billion, by 2017.
Note: The $67 billion cybersecurity industry is poised for a boom – and you can get in before it takes off. Here are the best cybersecurity stocks to buy now.
FireEye has a foothold in a market that's about to explode. Here's its story – and why it will continue to soar for investors…
FireEye (Nasdaq: FEYE) to Soar in 2014
Much of FireEye's short ride has been successful.
The company priced its IPO at $20.00 per share, with 15.2 million shares. By closing bell that day, FEYE stock was trading up by more than 100% and closed up $16 (80%) to $36.00. In the first six months of 2013, FireEye posted revenue of $61.6 million, up from $29.7 million from the same period a year prior. Net loss was also increased to $67.2 million, up from $14.3 a year before.
Founded in 2004, the Milpitas, Calif.-based company is taking its foothold among a new era of global network security firms that combat cyber attacks and malware.
What sets FireEye's technology apart is that its platform doesn't use "signatures" to protect from threats that the traditional firewalls, IPS, and antivirus use. Using signatures becomes problematic because they vastly raise the number of false positives and can block good traffic along with the bad.
Instead, founder Ashar Aziz's invention – the "FireEye Threat Prevention Platform" – is signature-less and provides real-time, dynamic threat protection across the different stages of an attack life cycle.
"This is preventing malware and things missed by signature-based approaches," FireEye chief security architect Marc Maiffret said to Network World back in 2010.
Former Symantec Corp. executive Ted Schlein had good things to say about FireEye's innovative approach to cybersecurity technology to Venture Capital Dispatch, as reported today via The Wall Street Journal.
"[FireEye] figured out a way to detonate Advanced Persistent Threats on the network on a virtual machine. No one had done that before – everybody was trying to keep attacks out of the network. It's a fool's errand. We have a very good understanding that signature-based protection doesn't work, and we've moved to behavioral-based protection."
So far in the New Year, the company has been on the move in more ways than its skyrocketing share value.
On Jan. 3, FireEye announced it would buy privately held forensic firm Mandiant in a $1.05 billion deal. The Alexandria, Va.-headquartered Mandiant is best known for identifying the Chinese military last year in the hacking of 115 American companies and businesses (an accusation Beijing denied). FEYE stock shot up more than 34% on the news.
And on Friday, FireEye announced a new cloud-based security analytics solution that further enables security teams to identify attacks and accelerate response times.
FireEye has more than 1,100 customers in over 40 countries, including more than 100 of the Fortune 500. Its stock closed at $76.31 per share – up 4.99% – on the day today.
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- Palo Alto Networks:
Second Quarter 2014 Financial Results
- Network World:
FireEye Malware Blockers Don't Rely on Signatures
- The Wall Street Journal:
Kleiner Perkins' Ted Schlein on Cybercrime Arms Race
- Dark Reading Security:
FireEye Announces Threat Analytics Capabilities for the FireEye Security Platform