"At $155 million in projected 2013 revenue, FireEye is just a little bigger than Imperva and smaller than Barracuda," Stiennon notes. "Yet Wall Street values FireEye more than Fortinet, Palo Alto Networks or Trend Micro. Post deal announcement, FireEye is valued at half of Check Point Software, which has almost 10 times the revenue."
Stiennon says "FireEye's strategy is clear. Use over-valued stock to acquire companies with revenue to feed Wall Street's expectations of rapid growth. Organic growth for such a small company is going to be difficult, especially when its well-entrenched competitors are introducing directly competing capabilities in their widely deployed platforms."
Stiennon says Fortinet and Palo Alto have already introduced advanced malware defenses as virtualized "sandboxes" that "detonate" incoming executables to detect malware without signatures with their firewall appliances. Trend Micro's Deep Discovery is another standalone sandboxing environment, he notes. There are others as well.
The FireEye/Mandiant combination bears some comparison to Cisco's acquisition of Sourcefire, with its intrusion-prevention and FireAMP advanced malware detection system, says Orans. He notes FireEye is also in beta with an IPS, with general availability later this year.
Sign up for CIO Asia eNewsletters.