GEN DIGITAL INC (GEN) Stock Fundamental Analysis
NASDAQ:GEN - Nasdaq - US6687711084 - Common Stock - Currency: USD
Taking everything into account, GEN scores 6 out of 10 in our fundamental rating. GEN was compared to 281 industry peers in the Software industry. While GEN belongs to the best of the industry regarding profitability, there are 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
GEN had positive earnings in the past year.
In the past year GEN had a positive cash flow from operations.
GEN had positive earnings in each of the past 5 years.
Of the past 5 years GEN 4 years had a positive operating cash flow.
1.2 Ratios
GEN's Return On Assets of 4.13% is fine compared to the rest of the industry. GEN outperforms 72.60% of its industry peers.
GEN has a better Return On Equity (29.52%) than 89.32% of its industry peers.
The Return On Invested Capital of GEN (11.02%) is better than 87.90% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GEN is in line with the industry average of 12.04%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.13% | ||
| ROE | 29.52% | ||
| ROIC | 11.02% |
ROA(3y)8.13%
ROA(5y)16.67%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.02%
ROIC(5y)13.04%
1.3 Margins
With an excellent Profit Margin value of 16.32%, GEN belongs to the best of the industry, outperforming 81.14% of the companies in the same industry.
GEN's Profit Margin has improved in the last couple of years.
The Operating Margin of GEN (41.57%) is better than 97.86% of its industry peers.
GEN's Operating Margin has improved in the last couple of years.
GEN has a better Gross Margin (80.29%) than 82.56% of its industry peers.
GEN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 41.57% | ||
| PM (TTM) | 16.32% | ||
| GM | 80.29% |
OM growth 3Y-9%
OM growth 5Y14.92%
PM growth 3Y-9.38%
PM growth 5Y66.52%
GM growth 3Y-1.98%
GM growth 5Y-0.16%
2. Health
2.1 Basic Checks
GEN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, GEN has less shares outstanding
GEN has less 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 1.15, we must say that GEN is in the distress zone and has some risk of bankruptcy.
GEN has a Altman-Z score (1.15) which is comparable to the rest of the industry.
GEN has a debt to FCF ratio of 3.98. This is a good value and a sign of high solvency as GEN would need 3.98 years to pay back of all of its debts.
GEN has a Debt to FCF ratio of 3.98. This is in the better half of the industry: GEN outperforms 61.21% of its industry peers.
A Debt/Equity ratio of 3.29 is on the high side and indicates that GEN has dependencies on debt financing.
GEN's Debt to Equity ratio of 3.29 is on the low side compared to the rest of the industry. GEN is outperformed by 81.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.29 | ||
| Debt/FCF | 3.98 | ||
| Altman-Z | 1.15 |
ROIC/WACC1.07
WACC10.34%
2.3 Liquidity
A Current Ratio of 0.35 indicates that GEN may have some problems paying its short term obligations.
GEN has a worse Current ratio (0.35) than 92.88% of its industry peers.
GEN has a Quick Ratio of 0.35. This is a bad value and indicates that GEN is not financially healthy enough and could expect problems in meeting its short term obligations.
GEN has a Quick ratio of 0.35. This is amonst the worse of the industry: GEN underperforms 92.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.35 |
3. Growth
3.1 Past
GEN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.29%, which is quite good.
Measured over the past 5 years, GEN shows a small growth in Earnings Per Share. The EPS has been growing by 4.27% on average per year.
Looking at the last year, GEN shows a small growth in Revenue. The Revenue has grown by 2.64% in the last year.
Measured over the past years, GEN shows a quite strong growth in Revenue. The Revenue has been growing by 9.19% on average per year.
EPS 1Y (TTM)14.29%
EPS 3Y10.57%
EPS 5Y4.27%
EPS Q2Q%14.29%
Revenue 1Y (TTM)2.64%
Revenue growth 3Y14.33%
Revenue growth 5Y9.19%
Sales Q2Q%3.68%
3.2 Future
Based on estimates for the next years, GEN will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.10% on average per year.
GEN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.58% yearly.
EPS Next Y13.94%
EPS Next 2Y11.77%
EPS Next 3Y10.88%
EPS Next 5Y9.1%
Revenue Next Year2.96%
Revenue Next 2Y3.12%
Revenue Next 3Y3.11%
Revenue Next 5Y2.58%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 11.85, the valuation of GEN can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of GEN indicates a rather cheap valuation: GEN is cheaper than 88.26% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.85. GEN is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 10.46 indicates a reasonable valuation of GEN.
Based on the Price/Forward Earnings ratio, GEN is valued cheaply inside the industry as 91.46% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of GEN to the average of the S&P500 Index (20.77), we can say GEN is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.85 | ||
| Fwd PE | 10.46 |
4.2 Price Multiples
GEN's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GEN is cheaper than 90.39% of the companies in the same industry.
GEN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GEN is cheaper than 97.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.4 | ||
| EV/EBITDA | 11.52 |
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.
The excellent profitability rating of GEN may justify a higher PE ratio.
PEG (NY)0.85
PEG (5Y)2.77
EPS Next 2Y11.77%
EPS Next 3Y10.88%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 2.00%.
Compared to an average industry Dividend Yield of 14.86, GEN pays a better dividend. On top of this GEN pays more dividend than 96.09% of the companies listed in the same industry.
GEN's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
5.2 History
On average, the dividend of GEN grows each year by 8.13%, which is quite nice.
GEN has paid a dividend for at least 10 years, which is a reliable track record.
GEN has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)8.13%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
GEN pays out 49.45% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of GEN is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP49.45%
EPS Next 2Y11.77%
EPS Next 3Y10.88%
25.6
-0.27 (-1.04%)
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 Change-0.2%
Market Cap15.78B
Analysts74.29
Price Target31.92 (24.69%)
Short Float %2.76%
Short Ratio3.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
Yearly Dividend0.51
Dividend Growth(5Y)8.13%
DP49.45%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.22%
Min EPS beat(2)-0.99%
Max EPS beat(2)0.55%
EPS beat(4)2
Avg EPS beat(4)0.12%
Min EPS beat(4)-0.99%
Max EPS beat(4)1.3%
EPS beat(8)4
Avg EPS beat(8)0.27%
EPS beat(12)8
Avg EPS beat(12)1.08%
EPS beat(16)12
Avg EPS beat(16)1.25%
Revenue beat(2)0
Avg Revenue beat(2)-0.74%
Min Revenue beat(2)-0.9%
Max Revenue beat(2)-0.57%
Revenue beat(4)0
Avg Revenue beat(4)-0.81%
Min Revenue beat(4)-1%
Max Revenue beat(4)-0.57%
Revenue beat(8)0
Avg Revenue beat(8)-0.82%
Revenue beat(12)1
Avg Revenue beat(12)-0.24%
Revenue beat(16)2
Avg Revenue beat(16)-0.31%
PT rev (1m)-1.51%
PT rev (3m)-2.12%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.64%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)0.42%
Revenue NQ rev (1m)-0.1%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.85 | ||
| Fwd PE | 10.46 | ||
| P/S | 4.05 | ||
| P/FCF | 7.4 | ||
| P/OCF | 7.35 | ||
| P/B | 7.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.52 |
EPS(TTM)2.16
EY8.44%
EPS(NY)2.45
Fwd EY9.56%
FCF(TTM)3.46
FCFY13.51%
OCF(TTM)3.48
OCFY13.6%
SpS6.32
BVpS3.49
TBVpS-16.8
PEG (NY)0.85
PEG (5Y)2.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.13% | ||
| ROE | 29.52% | ||
| ROCE | 13.95% | ||
| ROIC | 11.02% | ||
| ROICexc | 11.93% | ||
| ROICexgc | N/A | ||
| OM | 41.57% | ||
| PM (TTM) | 16.32% | ||
| GM | 80.29% | ||
| FCFM | 54.75% |
ROA(3y)8.13%
ROA(5y)16.67%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.02%
ROIC(5y)13.04%
ROICexc(3y)19.03%
ROICexc(5y)19.92%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)15.21%
ROCE(5y)16.51%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-32.93%
ROICexc growth 5Y20.86%
OM growth 3Y-9%
OM growth 5Y14.92%
PM growth 3Y-9.38%
PM growth 5Y66.52%
GM growth 3Y-1.98%
GM growth 5Y-0.16%
F-Score6
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.29 | ||
| Debt/FCF | 3.98 | ||
| Debt/EBITDA | 3.46 | ||
| Cap/Depr | 3.52% | ||
| Cap/Sales | 0.39% | ||
| Interest Coverage | 2.87 | ||
| Cash Conversion | 104.99% | ||
| Profit Quality | 335.59% | ||
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.35 | ||
| Altman-Z | 1.15 |
F-Score6
WACC10.34%
ROIC/WACC1.07
Cap/Depr(3y)3.41%
Cap/Depr(5y)7.78%
Cap/Sales(3y)0.31%
Cap/Sales(5y)0.95%
Profit Quality(3y)167.76%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)14.29%
EPS 3Y10.57%
EPS 5Y4.27%
EPS Q2Q%14.29%
EPS Next Y13.94%
EPS Next 2Y11.77%
EPS Next 3Y10.88%
EPS Next 5Y9.1%
Revenue 1Y (TTM)2.64%
Revenue growth 3Y14.33%
Revenue growth 5Y9.19%
Sales Q2Q%3.68%
Revenue Next Year2.96%
Revenue Next 2Y3.12%
Revenue Next 3Y3.11%
Revenue Next 5Y2.58%
EBIT growth 1Y43.31%
EBIT growth 3Y4.04%
EBIT growth 5Y25.48%
EBIT Next Year4.45%
EBIT Next 3Y4.95%
EBIT Next 5Y3.48%
FCF growth 1Y183.38%
FCF growth 3Y42.93%
FCF growth 5Y9.68%
OCF growth 1Y182.74%
OCF growth 3Y42.99%
OCF growth 5Y6.66%