GEN DIGITAL INC (GEN) Stock Fundamental Analysis
NASDAQ:GEN - Nasdaq - US6687711084 - Common Stock - Currency: USD
Taking everything into account, GEN scores 5 out of 10 in our fundamental rating. GEN was compared to 283 industry peers in the Software industry. While GEN belongs to the best of the industry regarding profitability, there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on GEN.
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.
GEN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GEN's Return On Assets of 4.15% is fine compared to the rest of the industry. GEN outperforms 72.08% 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 90.81% of the companies in the same industry.
The Return On Invested Capital of GEN (8.01%) is better than 79.51% of its industry peers.
The Average Return On Invested Capital over the past 3 years for GEN is significantly below the industry average of 12.00%.
The 3 year average ROIC (6.59%) for GEN is below the current ROIC(8.01%), indicating increased profibility in the last year.
| 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 81.63% of its industry peers.
GEN's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 41.17%, GEN belongs to the top of the industry, outperforming 95.41% of the companies in the same industry.
GEN's Operating Margin has improved in the last couple of years.
GEN has a Gross Margin of 80.28%. This is amongst the best in the industry. GEN outperforms 81.27% of its industry peers.
In the last couple of years the Gross Margin of GEN has remained more or less at the same level.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GEN is destroying value.
Compared to 1 year ago, GEN has less shares outstanding
Compared to 5 years ago, GEN has more shares outstanding
The debt/assets ratio for GEN has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.39, we must say that GEN is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.39, GEN is in line with its industry, outperforming 40.64% of the companies in the same 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 of 6.85. This is comparable to the rest of the industry: GEN outperforms 53.71% of 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's Debt to Equity ratio of 3.51 is on the low side compared to the rest of the industry. GEN is outperformed by 83.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.51 | ||
| Debt/FCF | 6.85 | ||
| Altman-Z | 1.39 |
ROIC/WACC0.76
WACC10.52%
2.3 Liquidity
A Current Ratio of 0.51 indicates that GEN may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.51, GEN is doing worse than 90.46% of the companies in the same industry.
GEN has a Quick 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.
GEN's Quick ratio of 0.51 is on the low side compared to the rest of the industry. GEN is outperformed by 89.75% 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 15.35% 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.
The Revenue has been growing slightly by 3.55% in the past 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)15.35%
EPS 3Y8.25%
EPS 5Y9.66%
EPS Q2Q%20.75%
Revenue 1Y (TTM)3.55%
Revenue growth 3Y12.06%
Revenue growth 5Y9.58%
Sales Q2Q%30.26%
3.2 Future
The Earnings Per Share is expected to grow by 7.46% on average over the next years.
The Revenue is expected to grow by 5.83% on average over the next years.
EPS Next Y13.85%
EPS Next 2Y12.62%
EPS Next 3Y12.58%
EPS Next 5Y7.46%
Revenue Next Year20.79%
Revenue Next 2Y12.71%
Revenue Next 3Y10.51%
Revenue Next 5Y5.83%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 13.52, GEN is valued correctly.
Based on the Price/Earnings ratio, GEN is valued cheaper than 85.51% of the companies in the same industry.
GEN is valuated rather cheaply when we compare the Price/Earnings ratio to 26.85, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 11.19, the valuation of GEN can be described as very reasonable.
Based on the Price/Forward Earnings ratio, GEN is valued cheaply inside the industry as 90.46% of the companies are valued more expensively.
GEN is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.52 | ||
| Fwd PE | 11.19 |
4.2 Price Multiples
GEN's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GEN is cheaper than 87.63% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GEN indicates a rather cheap valuation: GEN is cheaper than 87.99% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.08 | ||
| EV/EBITDA | 13.03 |
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.
A more expensive valuation may be justified as GEN's earnings are expected to grow with 12.58% in the coming years.
PEG (NY)0.98
PEG (5Y)1.4
EPS Next 2Y12.62%
EPS Next 3Y12.58%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 1.59%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 48.85, GEN pays a better dividend. On top of this GEN pays more dividend than 95.41% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.36, GEN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.59% |
5.2 History
The dividend of GEN decreases each year by -47.18%.
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)-47.18%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
48.68% of the earnings are spent on dividend by GEN. This is a bit on the high side, but may be sustainable.
DP48.68%
EPS Next 2Y12.62%
EPS Next 3Y12.58%
31.5
+0.13 (+0.41%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners88.24%
Inst Owner Change0%
Ins Owners9.31%
Ins Owner Change2.6%
Market Cap19.39B
Analysts76.25
Price Target34.04 (8.06%)
Short Float %2.74%
Short Ratio3.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.59% |
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)8%
PT rev (3m)6.66%
EPS NQ rev (1m)0.26%
EPS NQ rev (3m)0.32%
EPS NY rev (1m)0%
EPS NY rev (3m)0.07%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)-0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.52 | ||
| Fwd PE | 11.19 | ||
| P/S | 4.93 | ||
| P/FCF | 16.08 | ||
| P/OCF | 15.88 | ||
| P/B | 8.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.03 |
EPS(TTM)2.33
EY7.4%
EPS(NY)2.82
Fwd EY8.94%
FCF(TTM)1.96
FCFY6.22%
OCF(TTM)1.98
OCFY6.3%
SpS6.39
BVpS3.69
TBVpS-16.62
PEG (NY)0.98
PEG (5Y)1.4
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 | 1.39 |
F-Score8
WACC10.52%
ROIC/WACC0.76
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)15.35%
EPS 3Y8.25%
EPS 5Y9.66%
EPS Q2Q%20.75%
EPS Next Y13.85%
EPS Next 2Y12.62%
EPS Next 3Y12.58%
EPS Next 5Y7.46%
Revenue 1Y (TTM)3.55%
Revenue growth 3Y12.06%
Revenue growth 5Y9.58%
Sales Q2Q%30.26%
Revenue Next Year20.79%
Revenue Next 2Y12.71%
Revenue Next 3Y10.51%
Revenue Next 5Y5.83%
EBIT growth 1Y38.82%
EBIT growth 3Y16.07%
EBIT growth 5Y21.14%
EBIT Next Year9.48%
EBIT Next 3Y9.11%
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