Gen Digital Inc. (NASDAQ: GEN)

Sector: Technology Industry: Software - Infrastructure CIK: 0000849399
Market Cap 16.52 Bn
P/B 6.73
P/E 28.99
P/S 3.69
ROIC (Qtr) 8.61
Div Yield % 2.32
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...

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Price action

Investment thesis

Bull case

  • 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.

Bear case

  • 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.

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.53 2.69
EV to Cash from Ops. EV/CFO 18.55 28.91
EV to Debt EV to Debt 2.82 19.83
EV to EBIT EV/EBIT 15.29 -9.95
EV to EBITDA EV/EBITDA 11.43 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 18.76 26.09
EV to Market Cap EV to Market Cap 1.49 0.36
EV to Revenue EV/Rev 5.49 -9.34
Price to Book Value [P/B] P/B 6.73 3.88
Price to Earnings [P/E] P/E 28.99 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.82 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 53.80 2.71
Dividend per Basic Share Div per Share (Qtr) 0.50 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 23.53 1.68
Interest Coverage Int. cover (Qtr) 2.78 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -400.00 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -4.88 226.39
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -13.80 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 7.02 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.48 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 11.26 14.16
EPS Growth (1y) % EPS 1y % (Qtr) -5.10 67.50
FCF Growth (1y) % FCF 1y % (Qtr) -38.60 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 14.64 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.28 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.23 0.01
Cash Ratio Cash Ratio (Qtr) 0.27 1.22
Current Ratio Curr Ratio (Qtr) 0.51 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 3.54 -0.96
Interest Cover Ratio Int Coverage (Qtr) 2.78 -14.20
Times Interest Earned Times Interest Earned (Qtr) 2.78 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 46.50 -548.16
EBIT Margin % EBIT Margin % (Qtr) 35.90 -199.84
EBT Margin % EBT Margin % (Qtr) 22.98 -607.20
Gross Margin % Gross Margin % (Qtr) 79.30 51.88
Net Profit Margin % Net Margin % (Qtr) 12.70 -610.00