Stocks of several cyber-security companies such as FireEye Inc (NASDAQ:FEYE) and Palo Alto Networks Inc (NYSE:PANW) came under fire in yesterday’s trade session as markets took a turn for the worse. The technology sector was hit hard, with NASDAQ Composite (NASDAQ:IXIC) down by more than 3% as momentum names sold off sharply and consequently hurt investor confidence on several software stocks.
Both the aforementioned cyber-security companies managed to carve out new record lows while peers, Cyberark Software Ltd (NASDAQ:CYBR), and Fortinet slumped over 6%. Weakness and ongoing turbulence in the cyber space have spurred numerous acquisition rumors. Last week, one of the leading providers of online threat-detection solutions, Barracuda reportedly hired Morgan Stanley to find potential buyers for the company, after it witnessed a decline of 38% in its stock price.
Further, the downturn in the market was also reflected in FireEye’s recent fourth quarter preliminary results as the company provided soft revenue guidance. FireEye expects to post revenue in the range of $184-185 million for its coming quarter, compared to consensus estimate of $186.6 million. Analysts at Piper Jaffray have highlighted results for a recent survey of 37 IT distributors which indicates weaker end-market demand and growing pricing pressures in the cyber-security industry.
Despite the ongoing sell off, analysts on Wall Street are still bullish on cyber-security stocks based on the increasing cyber attacks. Cybersecurity names had a terrible week in general, as share prices of FireEye and Palo Alto tanked by 6% and 12% respectively in the last five days which highlights the uncertainty in the industry.