FireEye Inc.’s stock tumbled 6.8% in morning trade Monday, putting it on track to close at a nine-month low, after the cyber security company was downgraded at Piper Jaffray because of concerns over increasing competition. Analyst Andrew Nowinski lowered his rating to neutral, after being at overweight since starting coverage 14 months ago. He slashed his stock price target to $37, or 20% above current levels, from $60. He said besides competition, he’s also worried about conflicts within the sales channel and recent executive turnover. “The primary reason we are downgrading shares to neutral is our belief that competition has increased for FireEye, whereby the top four firewall vendors (about 48% of the total firewall market) now have their own ‘sandbox’ technology,” Nowinski wrote in a note to clients. “Moreover, the current valuation leaves little room for error if any of the aforementioned issues slow revenue growth.” The stock has tumbled 36% over the past three months, while the S&P 500 has lost 5%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News