FireEye (FEYE) has been on a downward spiral all year, losing 18% since the start of the year. Trading at near all-time lows of $17.06, the stock is a cheap buy, but analysts suspect that the company may be positioned for a turnaround.
FireEye has lost nearly 80% of its value since February 2014.
But the good news for investors is that the company has rallied in the past, and may be able to repeat this performance in 2016.
1. A Major Data Breach
FireEye became famous after the company alerted Target that there was a major data breach at the company in 2013. This external factor boosted the company’s revenue. A new data breach may result in FireEye shares soaring.
VK.com suffered a 171M account data breach this morning, and LinkedIn recently suffered a data breach, too.
FireEye offers advanced persistent threat (APT) protection that is geared towards enterprises.
2. FireEye Becomes Profitable
FireEye has been bleeding money, with just one quarter out of the last nine being profitable. The company posted negative $23 million in Q1 2016 in cash flow after acquisitions and was only profitable in Q2 2015 when the company posted $39 million in operating cash flow.
The company expected $70 – $80 million in positive cash flow on the year.
If the company can make itself appear less speculative, they’ll have a chance to bolster investor confidence.
3. FireEye Gets Acquired
The final catalyst that could lift the company’s stock back to favorable numbers is if it gets acquired by another company. The company has a revolutionary product, but it has struggled to find a way to be profitable.
The company may be an unwise choice to sell as stock prices are near all-time lows, but a potential acquisition would make sense for the company if it can’t find profit stability in the near future.