Don't Get Too Excited About FireEye's Cloud-Computing Transformation
After releasing better-than-expected third-quarter results last month, FireEye (NASDAQ: FEYE) last week announced a cloud acquisition and a strategic investment to accelerate its transformation as a cloud cybersecurity player. Following the news, the stock price jumped by more than 6%, but investors shouldn't get too excited.
Over the last several years, FireEye developed a portfolio of cloud and managed services to offset the decline of its legacy hardware businesses. And during the last quarter of 2019, the cybersecurity specialist reached an inflection point: Revenue from on-premises businesses dropped below half of total revenue. And thanks to the company's new initiatives, revenue increased 6% year over year to $238 million during the third quarter.
In particular, FireEye's platform Mandiant Solutions, which leverages cybersecurity experts' knowledge to propose cybersecurity services, fueled that growth. That trend should continue as the company released in October its Mandiant Advantage -- a cloud-native security-as-a-service (SaaS) version of Mandiant Solutions.
Source Fool.com
