Gen Digital Inc. (GEN) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0000849399

P/B 6.83

P/E 29.44

P/S 3.75

Market Cap 16.78 Bn

ROIC (Qtr) 8.61

Div Yield % 2.28

Rev 1y % (Qtr) 25.26

Total Debt (Qtr) 8.70 Bn

Debt/Equity (Qtr) 3.54

About

Gen Digital Inc., commonly referred to as Gen, is a prominent player in the technology industry, specializing in cyber safety, identity protection, and online privacy solutions. The company boasts a diverse portfolio of trusted brands, including Norton, Avast, LifeLock, Avira, AVG, ReputationDefender, and CCleaner. Gen's mission is to empower people to fully leverage the digital world, ensuring their safety, privacy, and confidence in their online activities. Gen's primary business activities revolve around providing comprehensive and user-friendly...

Gen Digital Inc., commonly referred to as Gen, is a prominent player in the technology industry, specializing in cyber safety, identity protection, and online privacy solutions. The company boasts a diverse portfolio of trusted brands, including Norton, Avast, LifeLock, Avira, AVG, ReputationDefender, and CCleaner. Gen's mission is to empower people to fully leverage the digital world, ensuring their safety, privacy, and confidence in their online activities.

Gen's primary business activities revolve around providing comprehensive and user-friendly integrated platforms that cater to the digital protection needs of individuals, families, small businesses, and large enterprises across more than 150 countries. The company's offerings include security and performance solutions, identity protection, and online privacy tools designed to combat the ever-evolving landscape of cyber threats and crimes.

The company's revenue is generated through a variety of primary products and services. Gen's flagship offerings include Norton 360 and Avast One, which provide all-encompassing membership plans with an array of features and benefits, such as real-time threat protection, identity theft protection, and online privacy protection. Additionally, Gen offers point solutions, which are individual, stand-alone products and services that address specific needs, like antivirus software, firewall protection, and online backup services.

Gen maintains a robust position within the industry, recognized for delivering high-quality products and services that cater to the dynamic needs of consumers. Key competitors include Apple, Bitdefender, ESET, F-Secure, Google, Kaspersky, Malwarebytes, McAfee, Microsoft, Trend Micro, and Webroot. Gen's competitive advantages include its wide-ranging and effective service offerings, strong brand recognition, cutting-edge technology, and customer satisfaction.

Gen's clientele encompasses a broad spectrum of individuals, families, and businesses. These customers utilize Gen's products and services to secure their digital lives from cyber threats and crimes, safeguard team online activities, devices, and customer data, and protect employees' devices, networks, and data from cyber threats and crimes.

Gen's brand names and trade names include Norton, Avast, LifeLock, Avira, AVG, ReputationDefender, and CCleaner. These trusted brands symbolize the company's commitment to providing top-tier digital protection solutions, ensuring the safe and confident navigation of the digital world for its users.

Gen Digital Inc. is a global powerhouse in the technology industry, providing crucial digital protection services through its esteemed family of brands. Committed to innovation and customer satisfaction, Gen continues to expand its reach and impact, ensuring a safer and more secure digital experience for users worldwide.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 701M provide 2.50x coverage of short-term debt 280M, demonstrating strong liquidity position and minimal refinancing risk.
Robust free cash flow of 1.31B exceeds capital expenditure of 15M by 87.27x, indicating strong organic growth funding capability.
Operating cash flow of 1.32B fully covers other non-current liabilities 759M by 1.74x, showing strong long-term stability.
Free cash flow of 1.31B provides robust 3.50x coverage of R&D expenses 374M, enabling sustainable innovation investment.
Free cash flow of 1.31B provides healthy 0.51x coverage of current liabilities 2.55B, showing strong operational health.

Cons

Operating cash flow of 1.32B barely covers its investment activities of (970M), with a coverage ratio of -1.36, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 1.32B provides thin coverage of dividend payments of (313M) with a -4.23 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Investment activities of (970M) provide weak support for R&D spending of 374M, which is -2.59x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Cash reserves of 701M provide limited coverage of acquisition spending of (960M), which is -0.73x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
Operating cash flow of 1.32B provides insufficient coverage of deferred revenue obligations of 1.86B, which is 0.71x, raising concerns about future service delivery capabilities.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	1.55	2.56
EV to Cash from Ops.	18.74	38.32
EV to Debt	2.85	-11.37
EV to EBIT	15.45	-12.79
EV to EBITDA	11.55	7.72
EV to Free Cash Flow [EV/FCF]	18.96	24.22
EV to Market Cap	1.48	0.58
EV to Revenue	5.55	-35.00
Price to Book Value [P/B]	6.83	3.74
Price to Earnings [P/E]	29.44	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	1.82	-0.30
Dividend Payout Ratio %	53.80	2.69
Dividend per Basic Share	0.50	0.10
FCF Dividend Payout Ratio %	23.53	1.67
Interest Coverage	2.78	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-400.00	-404.11
Cash and Equivalents Growth (1y) %	-4.88	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	-13.80	31.15
EBITDA Growth (1y) %	7.02	49.02
EBIT Growth (1y) %	3.48	25.85
EBT Growth (1y) %	11.26	17.82
EPS Growth (1y) %	-5.10	70.69
FCF Growth (1y) %	-38.60	295.45
Gross Profit Growth (1y) %	14.64	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.28	0.68
Cash Payout Ratio	0.23	0.02
Cash Ratio	0.27	1.21
Current Ratio	0.51	2.57
Debt to Equity Ratio	3.54	-0.93
Interest Cover Ratio	2.78	-13.15
Times Interest Earned	2.78	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	46.50	-544.82
EBIT Margin %	35.90	-197.78
EBT Margin %	22.98	-602.74
Gross Margin %	79.30	52.06
Net Profit Margin %	12.70	-605.52

Gen Digital Inc. (NASDAQ: GEN)