GEN DIGITAL INC (GEN) Stock Fundamental Analysis
USA - NASDAQ:GEN - US6687711084 - Common Stock
28.99 USD
+0.13 (+0.45%)
28.99 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to GEN. GEN was compared to 279 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 is valued quite cheap, while showing a decent growth score. This is a good combination!
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.
Each year in the past 5 years GEN had a positive operating cash flow.
1.2 Ratios
The Return On Assets of GEN (3.65%) is better than 70.11% of its industry peers.
GEN has a Return On Equity of 25.24%. This is amongst the best in the industry. GEN outperforms 90.04% of its industry peers.
GEN has a better Return On Invested Capital (7.68%) than 79.00% 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 11.86%.
The last Return On Invested Capital (7.68%) for GEN is above the 3 year average (6.59%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.65% | ||
| ROE | 25.24% | ||
| ROIC | 7.68% |
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's Profit Margin of 14.12% is fine compared to the rest of the industry. GEN outperforms 78.29% of its industry peers.
In the last couple of years the Profit Margin of GEN has declined.
Looking at the Operating Margin, with a value of 39.27%, GEN belongs to the top of the industry, outperforming 95.37% of the companies in the same industry.
In the last couple of years the Operating Margin of GEN has grown nicely.
With an excellent Gross Margin value of 79.82%, GEN belongs to the best of the industry, outperforming 80.43% of the companies in the same industry.
GEN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 39.27% | ||
| PM (TTM) | 14.12% | ||
| GM | 79.82% |
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.
Compared to 1 year ago, GEN has less shares outstanding
GEN has more shares outstanding than it did 5 years ago.
The debt/assets ratio for GEN has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.27, we must say that GEN is in the distress zone and has some risk of bankruptcy.
GEN has a worse Altman-Z score (1.27) than 63.35% of its industry peers.
GEN has a debt to FCF ratio of 6.57. This is a slightly negative value and a sign of low solvency as GEN would need 6.57 years to pay back of all of its debts.
The Debt to FCF ratio of GEN (6.57) is comparable to the rest of the industry.
A Debt/Equity ratio of 3.63 is on the high side and indicates that GEN has dependencies on debt financing.
GEN has a Debt to Equity ratio of 3.63. This is amonst the worse of the industry: GEN underperforms 83.99% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.63 | ||
| Debt/FCF | 6.57 | ||
| Altman-Z | 1.27 |
ROIC/WACC0.73
WACC10.48%
2.3 Liquidity
A Current Ratio of 0.50 indicates that GEN may have some problems paying its short term obligations.
GEN has a Current ratio of 0.50. This is amonst the worse of the industry: GEN underperforms 89.68% of its industry peers.
GEN has a Quick Ratio of 0.50. This is a bad value and indicates that GEN is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.50, GEN is not doing good in the industry: 89.68% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.5 |
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.
GEN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.34%.
Measured over the past years, GEN shows a quite strong growth in Revenue. The Revenue has been growing by 9.58% on average per year.
EPS 1Y (TTM)15.35%
EPS 3Y8.25%
EPS 5Y9.66%
EPS Q2Q%20.75%
Revenue 1Y (TTM)10.34%
Revenue growth 3Y12.06%
Revenue growth 5Y9.58%
Sales Q2Q%30.26%
3.2 Future
GEN is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.46% yearly.
GEN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.83% yearly.
EPS Next Y15.28%
EPS Next 2Y13.84%
EPS Next 3Y12.67%
EPS Next 5Y7.46%
Revenue Next Year23.82%
Revenue Next 2Y14.02%
Revenue Next 3Y10.67%
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.
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
With a Price/Earnings ratio of 12.44, GEN is valued correctly.
GEN's Price/Earnings ratio is rather cheap when compared to the industry. GEN is cheaper than 87.90% of the companies in the same industry.
When comparing the Price/Earnings ratio of GEN to the average of the S&P500 Index (27.38), we can say GEN is valued rather cheaply.
A Price/Forward Earnings ratio of 10.08 indicates a reasonable valuation of GEN.
GEN's Price/Forward Earnings 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/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.44 | ||
| Fwd PE | 10.08 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GEN indicates a rather cheap valuation: GEN is cheaper than 89.68% of the companies listed 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 92.17% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.24 | ||
| EV/EBITDA | 12.36 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GEN has a very decent profitability rating, which may justify a higher PE ratio.
GEN's earnings are expected to grow with 12.67% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.81
PEG (5Y)1.29
EPS Next 2Y13.84%
EPS Next 3Y12.67%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 1.73%. Purely for dividend investing, there may be better candidates out there.
GEN's Dividend Yield is rather good when compared to the industry average which is at 40.43. GEN pays more dividend than 95.37% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.38, GEN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.73% |
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
52.43% of the earnings are spent on dividend by GEN. This is a bit on the high side, but may be sustainable.
DP52.43%
EPS Next 2Y13.84%
EPS Next 3Y12.67%
28.99
+0.13 (+0.45%)
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 Change2.82%
Market Cap17.85B
Analysts76.25
Price Target35.41 (22.15%)
Short Float %2.82%
Short Ratio4.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.73% |
Yearly Dividend0.5
Dividend Growth(5Y)-47.18%
DP52.43%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.24%
Min EPS beat(2)0.75%
Max EPS beat(2)5.74%
EPS beat(4)3
Avg EPS beat(4)1.51%
Min EPS beat(4)-0.99%
Max EPS beat(4)5.74%
EPS beat(8)4
Avg EPS beat(8)0.4%
EPS beat(12)8
Avg EPS beat(12)1.1%
EPS beat(16)12
Avg EPS beat(16)1.32%
Revenue beat(2)2
Avg Revenue beat(2)2.52%
Min Revenue beat(2)0.3%
Max Revenue beat(2)4.75%
Revenue beat(4)2
Avg Revenue beat(4)0.89%
Min Revenue beat(4)-0.9%
Max Revenue beat(4)4.75%
Revenue beat(8)2
Avg Revenue beat(8)-0.05%
Revenue beat(12)3
Avg Revenue beat(12)0.3%
Revenue beat(16)3
Avg Revenue beat(16)-0.02%
PT rev (1m)4.02%
PT rev (3m)12.34%
EPS NQ rev (1m)-0.32%
EPS NQ rev (3m)1.45%
EPS NY rev (1m)0%
EPS NY rev (3m)1.28%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.55%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)2.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.44 | ||
| Fwd PE | 10.08 | ||
| P/S | 4.22 | ||
| P/FCF | 13.24 | ||
| P/OCF | 13.07 | ||
| P/B | 7.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.36 |
EPS(TTM)2.33
EY8.04%
EPS(NY)2.88
Fwd EY9.92%
FCF(TTM)2.19
FCFY7.56%
OCF(TTM)2.22
OCFY7.65%
SpS6.86
BVpS3.84
TBVpS-17.78
PEG (NY)0.81
PEG (5Y)1.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.65% | ||
| ROE | 25.24% | ||
| ROCE | 12.29% | ||
| ROIC | 7.68% | ||
| ROICexc | 8.18% | ||
| ROICexgc | N/A | ||
| OM | 39.27% | ||
| PM (TTM) | 14.12% | ||
| GM | 79.82% | ||
| FCFM | 31.91% |
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-Score6
Asset Turnover0.26
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.63 | ||
| Debt/FCF | 6.57 | ||
| Debt/EBITDA | 4.09 | ||
| Cap/Depr | 3.9% | ||
| Cap/Sales | 0.4% | ||
| Interest Coverage | 3.02 | ||
| Cash Conversion | 65.17% | ||
| Profit Quality | 225.96% | ||
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.5 | ||
| Altman-Z | 1.27 |
F-Score6
WACC10.48%
ROIC/WACC0.73
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 Y15.28%
EPS Next 2Y13.84%
EPS Next 3Y12.67%
EPS Next 5Y7.46%
Revenue 1Y (TTM)10.34%
Revenue growth 3Y12.06%
Revenue growth 5Y9.58%
Sales Q2Q%30.26%
Revenue Next Year23.82%
Revenue Next 2Y14.02%
Revenue Next 3Y10.67%
Revenue Next 5Y5.83%
EBIT growth 1Y37.87%
EBIT growth 3Y16.07%
EBIT growth 5Y21.14%
EBIT Next Year9.48%
EBIT Next 3Y9.22%
EBIT Next 5Y3.55%
FCF growth 1Y77.5%
FCF growth 3Y7.6%
FCF growth 5YN/A
OCF growth 1Y77.86%
OCF growth 3Y7.82%
OCF growth 5YN/A