Shares of FireEye plunged 13.1% on Wednesday after the company reported that it was hit by a cyberattack and hackers stole some sensitive “Red Team” tools. Notably, the Red Team tools are used by the cybersecurity company’s officials to test customer’s security.
FireEye (FEYE) called the attack “highly sophisticated cyber threat” and suspects that the act is done by state-sponsored hackers of foreign nationals. However, the company hasn’t been able to identify the suspected country.
In a blog posted on its website on Dec. 8, FireEye’s CEO Kevin Mandia wrote, “We are actively investigating in coordination with the Federal Bureau of Investigation and other key partners, including Microsoft. Their initial analysis supports our conclusion that this was the work of a highly sophisticated state-sponsored attacker utilizing novel techniques.” (See FEYE stock analysis on TipRanks)
According to FireEye, “the attacker primarily sought information related to certain government customers.”
Citigroup analyst Walter Pritchard fears that the data breach could damage its reputation and may pose a risk of customers not buying cybersecurity solutions from the company. Pritchard pointed out that McAfee and RSA Security had suffered similar threats in the past, which impacted their businesses in the quarter they occurred. The analyst reiterated his Hold rating on the stock.
Overall, the Street is sidelined on the stock. The Hold analyst consensus is based on 2 Holds, 2 Buys and 1 Sell. The average price target stands at $17.50 and implies upside potential of about 29.7% to current levels. Shares have dropped by 18.4% year-to-date.
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