GEN DIGITAL INC (GEN)
US6687711084 - Common Stock
We assign a fundamental rating of 5 out of 10 to GEN. GEN was compared to 277 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
In the past year GEN was profitable.
GEN had a positive operating cash flow in the past year.
GEN had positive earnings in 4 of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: GEN reported negative operating cash flow in multiple years.
1.2 Ratios
GEN has a better Return On Assets (8.58%) than 88.77% of its industry peers.
GEN's Return On Equity of 57.78% is amongst the best of the industry. GEN outperforms 97.46% of its industry peers.
GEN has a better Return On Invested Capital (6.60%) than 83.33% of its industry peers.
GEN had an Average Return On Invested Capital over the past 3 years of 16.42%. This is significantly above the industry average of 10.38%.
The 3 year average ROIC (16.42%) for GEN is well above the current ROIC(6.60%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.58% | ||
| ROE | 57.78% | ||
| ROIC | 6.6% |
ROA(3y)9.74%
ROA(5y)15.93%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)16.42%
ROIC(5y)12.3%
1.3 Margins
GEN's Profit Margin of 36.84% is amongst the best of the industry. GEN outperforms 97.10% of its industry peers.
In the last couple of years the Profit Margin of GEN has declined.
With an excellent Operating Margin value of 29.77%, GEN belongs to the best of the industry, outperforming 97.10% of the companies in the same industry.
GEN's Operating Margin has improved in the last couple of years.
GEN's Gross Margin of 80.72% is amongst the best of the industry. GEN outperforms 84.42% 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 | 29.77% | ||
| PM (TTM) | 36.84% | ||
| GM | 80.72% |
OM growth 3Y15.9%
OM growth 5Y34.47%
PM growth 3Y-36.27%
PM growth 5Y-1.9%
GM growth 3Y-0.74%
GM growth 5Y0.11%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), GEN is creating some value.
There is no outstanding debt for GEN. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
GEN has an Altman-Z score of 1.04. This is a bad value and indicates that GEN is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.04, GEN is not doing good in the industry: 61.23% of the companies in the same industry are doing better.
GEN has a debt to FCF ratio of 9.52. This is a negative value and a sign of low solvency as GEN would need 9.52 years to pay back of all of its debts.
The Debt to FCF ratio of GEN (9.52) is comparable to the rest of the industry.
GEN has a Debt/Equity ratio of 3.76. This is a high value indicating a heavy dependency on external financing.
GEN has a worse Debt to Equity ratio (3.76) than 84.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.76 | ||
| Debt/FCF | 9.52 | ||
| Altman-Z | 1.04 |
ROIC/WACC0.68
WACC9.71%
2.3 Liquidity
GEN has a Current Ratio of 0.67. 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 Current ratio of 0.67. This is amonst the worse of the industry: GEN underperforms 90.22% of its industry peers.
A Quick Ratio of 0.67 indicates that GEN may have some problems paying its short term obligations.
GEN's Quick ratio of 0.67 is on the low side compared to the rest of the industry. GEN is outperformed by 89.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.42% over the past year.
Measured over the past 5 years, GEN shows a small growth in Earnings Per Share. The EPS has been growing by 1.50% on average per year.
Looking at the last year, GEN shows a very strong growth in Revenue. The Revenue has grown by 22.05%.
The Revenue has been growing slightly by 5.46% on average over the past years.
EPS 1Y (TTM)4.42%
EPS 3Y8.94%
EPS 5Y1.5%
EPS growth Q2Q8.89%
Revenue 1Y (TTM)22.05%
Revenue growth 3Y10.26%
Revenue growth 5Y5.46%
Revenue growth Q2Q1.6%
3.2 Future
GEN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.01% yearly.
GEN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.82% yearly.
EPS Next Y9.05%
EPS Next 2Y11.68%
EPS Next 3Y12.03%
EPS Next 5Y12.01%
Revenue Next Year14.42%
Revenue Next 2Y8.83%
Revenue Next 3Y7.07%
Revenue Next 5Y5.82%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.41, GEN is valued correctly.
GEN's Price/Earnings ratio is rather cheap when compared to the industry. GEN is cheaper than 90.94% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.43, GEN is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.39, the valuation of GEN can be described as very reasonable.
GEN's Price/Forward Earnings ratio is rather cheap when compared to the industry. GEN is cheaper than 94.57% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.51, GEN is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.41 | ||
| Fwd PE | 10.39 |
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 89.49% 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 89.13% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.37 | ||
| EV/EBITDA | 14.55 |
4.3 Compensation for Growth
GEN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of GEN may justify a higher PE ratio.
GEN's earnings are expected to grow with 12.03% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.37
PEG (5Y)8.27
EPS Next 2Y11.68%
EPS Next 3Y12.03%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 2.46%.
GEN's Dividend Yield is rather good when compared to the industry average which is at 11.42. GEN pays more dividend than 96.01% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, GEN has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
5.2 History
The dividend of GEN is nicely growing with an annual growth rate of 8.45%!
GEN has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of GEN decreased in the last 3 years.
Dividend Growth(5Y)8.45%
Div Incr Years0
Div Non Decr Years2
5.3 Sustainability
GEN pays out 23.26% of its income as dividend. This is a sustainable payout ratio.
GEN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP23.26%
EPS Next 2Y11.68%
EPS Next 3Y12.03%
GEN DIGITAL INC
NASDAQ:GEN (5/10/2024, 7:00:01 PM)
After market: 23.42 -0.04 (-0.17%)23.46
+3.12 (+15.34%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap14.94B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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Revenue beat(2)
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Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.41 | ||
| Fwd PE | 10.39 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.37
PEG (5Y)8.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.58% | ||
| ROE | 57.78% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 29.77% | ||
| PM (TTM) | 36.84% | ||
| GM | 80.72% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.76 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.67 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)4.42%
EPS 3Y8.94%
EPS 5Y
EPS growth Q2Q
EPS Next Y9.05%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)22.05%
Revenue growth 3Y10.26%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y