GEN DIGITAL INC (GEN) Stock Fundamental Analysis
NASDAQ:GEN - Nasdaq - US6687711084 - Common Stock - Currency: USD
Overall GEN gets a fundamental rating of 5 out of 10. We evaluated GEN against 284 industry peers in the Software industry. While GEN has a great profitability rating, there are quite some concerns on its financial health. GEN may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
In the past year GEN was profitable.
In the past year GEN had a positive cash flow from operations.
Each year in the past 5 years GEN has been profitable.
GEN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of GEN (4.15%) is better than 74.30% of its industry peers.
Looking at the Return On Equity, with a value of 28.34%, GEN belongs to the top of the industry, outperforming 89.79% of the companies in the same industry.
GEN has a better Return On Invested Capital (8.01%) than 81.34% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GEN is significantly below the industry average of 12.30%.
The last Return On Invested Capital (8.01%) for GEN is above the 3 year average (6.59%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.15% | ||
| ROE | 28.34% | ||
| ROIC | 8.01% |
ROA(3y)5.48%
ROA(5y)7.44%
ROE(3y)39.34%
ROE(5y)N/A
ROIC(3y)6.59%
ROIC(5y)10.39%
1.3 Margins
GEN has a better Profit Margin (16.34%) than 83.80% of its industry peers.
In the last couple of years the Profit Margin of GEN has declined.
The Operating Margin of GEN (41.17%) is better than 97.18% of its industry peers.
In the last couple of years the Operating Margin of GEN has grown nicely.
The Gross Margin of GEN (80.28%) is better than 81.69% of its industry peers.
GEN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 41.17% | ||
| PM (TTM) | 16.34% | ||
| GM | 80.28% |
OM growth 3Y3.57%
OM growth 5Y10.54%
PM growth 3Y-18.24%
PM growth 5Y-36.32%
GM growth 3Y-2.04%
GM growth 5Y-0.95%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), GEN is destroying value.
GEN has less shares outstanding than it did 1 year ago.
GEN has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, GEN has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.34, we must say that GEN is in the distress zone and has some risk of bankruptcy.
GEN has a Altman-Z score (1.34) which is comparable to the rest of the industry.
The Debt to FCF ratio of GEN is 6.85, which is on the high side as it means it would take GEN, 6.85 years of fcf income to pay off all of its debts.
GEN has a Debt to FCF ratio (6.85) which is in line with its industry peers.
GEN has a Debt/Equity ratio of 3.51. This is a high value indicating a heavy dependency on external financing.
GEN has a Debt to Equity ratio of 3.51. This is amonst the worse of the industry: GEN underperforms 82.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.51 | ||
| Debt/FCF | 6.85 | ||
| Altman-Z | 1.34 |
ROIC/WACC0.78
WACC10.29%
2.3 Liquidity
GEN has a Current Ratio of 0.51. This is a bad value and indicates that GEN is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of GEN (0.51) is worse than 90.14% of its industry peers.
A Quick Ratio of 0.51 indicates that GEN may have some problems paying its short term obligations.
The Quick ratio of GEN (0.51) is worse than 89.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.51 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.27% over the past year.
Measured over the past years, GEN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.66% on average per year.
Looking at the last year, GEN shows a small growth in Revenue. The Revenue has grown by 3.23% in the last year.
GEN shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.58% yearly.
EPS 1Y (TTM)13.27%
EPS 3Y8.25%
EPS 5Y9.66%
EPS Q2Q%11.32%
Revenue 1Y (TTM)3.23%
Revenue growth 3Y12.06%
Revenue growth 5Y9.58%
Sales Q2Q%4.45%
3.2 Future
Based on estimates for the next years, GEN will show a small growth in Earnings Per Share. The EPS will grow by 7.05% on average per year.
The Revenue is expected to grow by 5.50% on average over the next years.
EPS Next Y13.77%
EPS Next 2Y12.69%
EPS Next 3Y11.86%
EPS Next 5Y7.05%
Revenue Next Year20.51%
Revenue Next 2Y12.35%
Revenue Next 3Y10.27%
Revenue Next 5Y5.5%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 13.64, the valuation of GEN can be described as correct.
90.14% of the companies in the same industry are more expensive than GEN, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of GEN to the average of the S&P500 Index (26.60), we can say GEN is valued slightly cheaper.
GEN is valuated reasonably with a Price/Forward Earnings ratio of 11.98.
Based on the Price/Forward Earnings ratio, GEN is valued cheaply inside the industry as 88.73% of the companies are valued more expensively.
GEN is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.39, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.64 | ||
| Fwd PE | 11.98 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GEN is valued cheaper than 88.38% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GEN is valued cheaply inside the industry as 89.79% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.57 | ||
| EV/EBITDA | 12.51 |
4.3 Compensation for Growth
GEN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GEN has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.99
PEG (5Y)1.41
EPS Next 2Y12.69%
EPS Next 3Y11.86%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 1.72%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 16.43, GEN pays a better dividend. On top of this GEN pays more dividend than 95.07% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.39, GEN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
5.2 History
The dividend of GEN decreases each year by -47.18%.
GEN has been paying a dividend for at least 10 years, so it has a reliable track record.
GEN has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-47.18%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
GEN pays out 48.68% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP48.68%
EPS Next 2Y12.69%
EPS Next 3Y11.86%
30.27
+0.83 (+2.82%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.59%
Inst Owner Change0%
Ins Owners9.43%
Ins Owner Change2.74%
Market Cap18.77B
Analysts75.71
Price Target31.52 (4.13%)
Short Float %2.88%
Short Ratio3.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
Yearly Dividend0.5
Dividend Growth(5Y)-47.18%
DP48.68%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.65%
Min EPS beat(2)0.55%
Max EPS beat(2)0.75%
EPS beat(4)2
Avg EPS beat(4)-0.02%
Min EPS beat(4)-0.99%
Max EPS beat(4)0.75%
EPS beat(8)4
Avg EPS beat(8)-0.17%
EPS beat(12)8
Avg EPS beat(12)0.99%
EPS beat(16)12
Avg EPS beat(16)1.03%
Revenue beat(2)1
Avg Revenue beat(2)-0.3%
Min Revenue beat(2)-0.9%
Max Revenue beat(2)0.3%
Revenue beat(4)1
Avg Revenue beat(4)-0.54%
Min Revenue beat(4)-1%
Max Revenue beat(4)0.3%
Revenue beat(8)1
Avg Revenue beat(8)-0.76%
Revenue beat(12)2
Avg Revenue beat(12)-0.21%
Revenue beat(16)2
Avg Revenue beat(16)-0.37%
PT rev (1m)-1.24%
PT rev (3m)-2.73%
EPS NQ rev (1m)1.88%
EPS NQ rev (3m)1.88%
EPS NY rev (1m)3.15%
EPS NY rev (3m)2.8%
Revenue NQ rev (1m)19.15%
Revenue NQ rev (3m)19.15%
Revenue NY rev (1m)8.42%
Revenue NY rev (3m)16.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.64 | ||
| Fwd PE | 11.98 | ||
| P/S | 4.77 | ||
| P/FCF | 15.57 | ||
| P/OCF | 15.38 | ||
| P/B | 8.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.51 |
EPS(TTM)2.22
EY7.33%
EPS(NY)2.53
Fwd EY8.34%
FCF(TTM)1.94
FCFY6.42%
OCF(TTM)1.97
OCFY6.5%
SpS6.34
BVpS3.66
TBVpS-16.5
PEG (NY)0.99
PEG (5Y)1.41
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.15% | ||
| ROE | 28.34% | ||
| ROCE | 12.81% | ||
| ROIC | 8.01% | ||
| ROICexc | 8.7% | ||
| ROICexgc | N/A | ||
| OM | 41.17% | ||
| PM (TTM) | 16.34% | ||
| GM | 80.28% | ||
| FCFM | 30.65% |
ROA(3y)5.48%
ROA(5y)7.44%
ROE(3y)39.34%
ROE(5y)N/A
ROIC(3y)6.59%
ROIC(5y)10.39%
ROICexc(3y)7.07%
ROICexc(5y)14.76%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)10.55%
ROCE(5y)16.63%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-35.61%
ROICexc growth 5Y-8.57%
OM growth 3Y3.57%
OM growth 5Y10.54%
PM growth 3Y-18.24%
PM growth 5Y-36.32%
GM growth 3Y-2.04%
GM growth 5Y-0.95%
F-Score8
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.51 | ||
| Debt/FCF | 6.85 | ||
| Debt/EBITDA | 3.91 | ||
| Cap/Depr | 3.58% | ||
| Cap/Sales | 0.38% | ||
| Interest Coverage | 2.91 | ||
| Cash Conversion | 59.88% | ||
| Profit Quality | 187.56% | ||
| Current Ratio | 0.51 | ||
| Quick Ratio | 0.51 | ||
| Altman-Z | 1.34 |
F-Score8
WACC10.29%
ROIC/WACC0.78
Cap/Depr(3y)3.18%
Cap/Depr(5y)3.56%
Cap/Sales(3y)0.36%
Cap/Sales(5y)0.31%
Profit Quality(3y)193.32%
Profit Quality(5y)164.42%
High Growth Momentum
Growth
EPS 1Y (TTM)13.27%
EPS 3Y8.25%
EPS 5Y9.66%
EPS Q2Q%11.32%
EPS Next Y13.77%
EPS Next 2Y12.69%
EPS Next 3Y11.86%
EPS Next 5Y7.05%
Revenue 1Y (TTM)3.23%
Revenue growth 3Y12.06%
Revenue growth 5Y9.58%
Sales Q2Q%4.45%
Revenue Next Year20.51%
Revenue Next 2Y12.35%
Revenue Next 3Y10.27%
Revenue Next 5Y5.5%
EBIT growth 1Y38.82%
EBIT growth 3Y16.07%
EBIT growth 5Y21.14%
EBIT Next Year9.74%
EBIT Next 3Y8.98%
EBIT Next 5Y3.55%
FCF growth 1Y-41%
FCF growth 3Y7.6%
FCF growth 5YN/A
OCF growth 1Y-40.84%
OCF growth 3Y7.82%
OCF growth 5YN/A