Gen Digital (GEN) AI Stock Analysis

• Market Cap: $15.98B
• Dividend Yield: 1.93%
• Average Volume (3M): 4.45M
• Price to Earnings (P/E): 25.6
• Beta (1Y): 1.00
• Revenue Growth: 2.64%
• EPS Growth: -53.16%
• Country: US
• Employees: 3,400
• Sector: Technology
• Sector Strength: 66
• Industry: Software - Infrastructure
• EPS (TTM): 1.01
• Shares Outstanding: 616,301,400
• 10 Day Avg. Volume: 3,386,563
• 30 Day Avg. Volume: 4,450,975
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.56
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 8.07
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $27.67
• Price Target Upside: 7.37% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

Gen Digital's overall score reflects strong financial performance and positive earnings call sentiment, offset by concerns about high leverage and a bearish technical outlook. Valuation is moderate, with some income potential from dividends.

Positive Factors

Acquisition Benefits

Gen Digital's acquisition of MoneyLion rounds out its financial wellness portfolio, thereby accelerating topline growth and EPS accretion.

Customer Growth

Customer net adds remained solid at 371K QoQ in Q3, well ahead of consensus.

Financial Guidance

Management raised the FY25 guidance for both revenue and EPS, and also guided above consensus for both 3Q25 and 4Q25.

Negative Factors

Booking Slowdown

Bookings also slowed to 3% YoY cc, down from 5% last quarter.

Customer Retention

Customer retention downticked 50bps QoQ to ~77.5%, which likely raises questions about the quality of these newer subscribers.

Financial Leverage

The company didn't repurchase any shares or pay down debt in Q2 and is currently operating at a 3.4x net leverage ratio.

Gen Digital Business Overview & Revenue Model

Company Description

Gen Digital Inc. provides cyber safety solutions for consumers in the United States, Canada, Latin America, Europe, the Middle East, Africa, the Asia Pacific, and Japan. It offers Norton 360, an integrated platform provides extensive cyber safety coverage and a subscription service providing protection for PCs, Macs, and mobile devices against malware, viruses, adware, ransomware, and other online threats on various platforms; and Norton and LifeLock identity theft protection solution that offers monitoring, alerts, and restoration services to its customers. The company also provides Norton Secure VPN solution, which enhances security and online privacy by providing an encrypted data tunnel; Privacy Monitor Assistant, an on-demand, white glove service where agents help members delete personal information from data brokers online; Home Title Protect product that detects fraud and notifies members; and Avira Security, a consumer-focused portfolio of cybersecurity and privacy solutions. It offers Dark Web Monitoring product, which looks for personal information of its Norton 360 members on the Dark Web; and Social Media Monitoring solution that helps to keep customers' social media accounts safer by monitoring them for account takeovers, risky activity, and inappropriate content. The company also provides AntiTrack product, which helps to keep personal information and browsing activity private by blocking trackers and disguising digital fingerprints online; and Online Reputation Management solution that manages online search results, personal branding, and digital privacy. It markets and sells its products and related services through retailers, telecom service providers, hardware original equipment manufacturers, and employee benefit providers, as well as e-commerce platform. The company was formerly known as NortonLifeLock Inc. and changed its name to Gen Digital Inc. in November 2022. Gen Digital Inc. was founded in 1982 and is based in Tempe, Arizona.

How the Company Makes Money

Gen Digital makes money primarily through a subscription-based revenue model. It generates income by offering its cybersecurity and digital privacy solutions to consumers and enterprises on a subscription basis. Key revenue streams include sales of antivirus software, identity protection services, and VPN subscriptions. The company also earns from its partnerships with other technology firms and through licensing agreements for its security technologies. Additionally, Gen Digital may engage in strategic alliances and collaborations that enhance its product offerings and expand its customer base, further contributing to its earnings.

Gen Digital Financial Statement Overview

Summary

Gen Digital demonstrates strong revenue growth and operational efficiency, with robust cash flow position. However, a high debt-to-equity ratio poses a risk, and net income fluctuations affect profitability.

Income Statement

Gen Digital has shown strong revenue growth with a consistent increase in total revenue over the years. The Gross Profit Margin is robust, reflecting effective cost management, and the Net Profit Margin remains healthy. EBIT and EBITDA margins indicate solid operational efficiency. However, the net income has fluctuated, impacting the overall profitability trajectory.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio, indicating significant leverage, which could pose a risk if not managed properly. The equity ratio has improved, reflecting stronger equity relative to assets. Return on Equity has been volatile, suggesting variability in shareholder returns.

Cash Flow

Operating Cash Flow is strong and exceeds net income, indicating good cash generation from operations. Free Cash Flow has grown significantly, showing effective capital expenditure management. The company has demonstrated a positive Free Cash Flow to Net Income ratio, reinforcing its ability to generate cash profitably.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
3.81B	3.34B	2.80B	2.55B	2.49B
	Gross Profit
3.08B	2.75B	2.39B	2.19B	2.10B
	EBIT
1.12B	1.23B	1.00B	896.00M	1.28B
	EBITDA
1.63B	1.56B	1.33B	1.19B	1.29B
	Net Income Common Stockholders
616.00M	1.35B	836.00M	554.00M	578.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
846.00M	750.00M	1.89B	951.00M	2.26B
	Total Assets
15.77B	15.95B	6.94B	6.36B	7.74B
	Total Debt
8.65B	9.82B	3.83B	3.69B	4.32B
	Net Debt
7.81B	9.07B	1.94B	2.76B	2.15B
	Total Liabilities
13.57B	13.75B	7.04B	6.86B	7.72B
	Stockholders Equity
2.20B	2.20B	-93.00M	-500.00M	10.00M
Cash Flow		Free Cash Flow
2.04B	751.00M	968.00M	700.00M	-950.00M
	Operating Cash Flow
2.06B	757.00M	974.00M	706.00M	-861.00M
	Investing Cash Flow
2.00M	-6.55B	326.00M	-69.00M	11.38B
	Financing Cash Flow
-1.96B	4.68B	-333.00M	-1.90B	-10.12B

Gen Digital Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 25.77
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GEN, the sentiment is Neutral. The current price of 25.77 is above the 20-day moving average (MA) of 24.83, below the 50-day MA of 26.23, and below the 200-day MA of 26.99, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 52.64 is Neutral, neither overbought nor oversold. The STOCH value of 86.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GEN.

Gen Digital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHKP	77 Outperform	$23.58B	28.73	30.92%	―	6.40%	6.49%
QLYS	74 Outperform	$4.65B	27.50	41.09%	―	10.40%	14.78%
GEN	72 Outperform	$15.98B	25.59	27.80%	1.93%	2.64%	-53.16%
CYBR	66 Neutral	$17.67B	1,777.39	-5.91%	―	33.10%	-20.31%
OKTA	61 Neutral	$17.68B	1,737.54	0.46%	―	15.33%	―
TENB	60 Neutral	$3.70B	―	-12.09%	―	11.79%	35.35%
Sector *	60 Neutral	$10.94B	10.48	-7.04%	2.99%	7.55%	-12.20%

Gen Digital Corporate Events

Gen Digital Prepares Investor Presentation for Credit Facility

Gen Digital Inc. has prepared an investor presentation for meetings with investors starting February 10, 2025. The presentation, available as part of a Current Report on Form 8-K, includes publicly available information and does not contain material non-public details about the company or its securities. This presentation serves to inform potential lenders about a proposed credit facility, with a focus on maintaining confidentiality and adherence to regulatory requirements.