This morning, Goldman Sachs analyst Gabriela Borges commented on two internet security names, taking diverging positions on FireEye (FEYE) and Proofpoint (PFPT). While the analyst double upgraded the former to Buy as she sees an emerging path to growth, Borges cut her rating on the latter to Sell, citing the stock's premium valuation.

BUY FIREEYE: In a research note to investors, Goldman Sachs' Borges double upgraded FireEye to Buy from Sell and raised her price target on the shares to $15 from $10. The analyst noted that 2017 product revenue and billings estimates have been reset, with a shift to a greater level of recurring revenue occurring faster than she expected. Further, Borges pointed out that she believes the introduction of Helix, an advanced analytics platform, addresses many of FireEye's challenges by reducing total cost of ownership by 33%-50%, and streamlining the company's go-to-market strategy under its new head of sales. Helix becomes generally available in April, she added.

Although the analyst acknowledged that it will likely take time for the provider of cybersecurity solutions to build sustained channel support, Borges believes momentum should build through 2017. Additionally, the analyst told investors that she expects estimates to be revised higher post a material reset over the last year, and stabilization in fundamentals is likely to drive a re-rating in the stock's multiple.

SELL PROOFPOINT: Also this morning, Goldman's Borges downgraded Proofpoint to Sell from Neutral and lowered her price target on the shares to $69 from $77. While the analyst told investors that she continues to view the company as a "best-in-class asset" with improving free cash flow, Borges argued that risk/reward for the stock is skewed negative.

Proofpoint screens as "one of the most expensive" stocks in Software after a "perfect storm" of fundamental tailwinds in 2015 and 2016, but these tailwinds are likely to normalize or reverse, she contended. Moreover, Borges noted that she believes Wall Street is "overestimating" the sustainability of growth, adding that she forecasts moderating share gains in email security. Further, the analyst pointed out that market momentum in email security and advanced threat protection is transitioning from "hyper growth" to a steadier state of adoption. She expects multiple compression for Proofpoint as growth slows.

PRICE ACTION: In morning trading, shares of FireEye have jumped about 10% to $12.61, while Proofpoint has dropped over 4% to $75.71 per share.