Overview
Since a few years ago, FireEye (FEYE), the cybersecurity company, has been shifting its focus away from appliance-based to a cloud-based business. The transition has not been very smooth as revenue growth has drastically slowed down while losses widened. Consequently, the shares have been trading at low to mid-teens, down by over 60% to 78% from its 5-year-high, and have not recovered since. There are potential upside opportunities as the adoption of cloud-based services strengthens. However, we will remain on a wait-and-see mode, given our concerns on the competition and the execution going forward.