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 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. 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.
GEN had a positive operating cash flow in the past year.
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 (4.15%) is better than 74.38% of its industry peers.
With an excellent Return On Equity value of 28.34%, GEN belongs to the best of the industry, outperforming 89.68% of the companies in the same industry.
With an excellent Return On Invested Capital value of 8.01%, GEN belongs to the best of the industry, outperforming 81.14% of the companies in the same industry.
GEN had an Average Return On Invested Capital over the past 3 years of 6.59%. This is significantly below the industry average of 12.19%.
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
The Profit Margin of GEN (16.34%) is better than 83.63% of its industry peers.
In the last couple of years the Profit Margin of GEN has declined.
With an excellent Operating Margin value of 41.17%, GEN belongs to the best of the industry, outperforming 97.15% of the companies in the same industry.
GEN's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 80.28%, GEN belongs to the best of the industry, outperforming 81.85% 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 | 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
GEN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for GEN has been reduced compared to 1 year ago.
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 1.37, we must say that GEN is in the distress zone and has some risk of bankruptcy.
GEN has a Altman-Z score (1.37) 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 comparable to the rest of the industry.
GEN has a Debt/Equity ratio of 3.51. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 3.51, GEN is doing worse than 83.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.51 | ||
| Debt/FCF | 6.85 | ||
| Altman-Z | 1.37 |
ROIC/WACC0.76
WACC10.57%
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.
GEN's Current ratio of 0.51 is on the low side compared to the rest of the industry. GEN is outperformed by 90.75% of its industry peers.
A Quick Ratio of 0.51 indicates that GEN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.51, GEN is doing worse than 90.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.51 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
GEN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.27%, which is quite good.
GEN shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.66% yearly.
GEN shows a small growth in Revenue. In the last year, the Revenue has grown by 3.23%.
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)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 Y13.85%
EPS Next 2Y12.62%
EPS Next 3Y12%
EPS Next 5Y7.05%
Revenue Next Year20.59%
Revenue Next 2Y12.56%
Revenue Next 3Y10.29%
Revenue Next 5Y5.5%
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 decreasing.
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
GEN is valuated correctly with a Price/Earnings ratio of 13.75.
Based on the Price/Earnings ratio, GEN is valued cheaply inside the industry as 88.97% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.93, GEN is valued rather cheaply.
A Price/Forward Earnings ratio of 12.08 indicates a correct valuation of GEN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GEN indicates a rather cheap valuation: GEN is cheaper than 90.39% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 37.78, GEN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.75 | ||
| Fwd PE | 12.08 |
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 88.61% 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 89.32% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.7 | ||
| EV/EBITDA | 12.84 |
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)0.99
PEG (5Y)1.42
EPS Next 2Y12.62%
EPS Next 3Y12%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 1.64%.
Compared to an average industry Dividend Yield of 31.80, GEN pays a better dividend. On top of this GEN pays more dividend than 95.02% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.32, GEN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
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
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%
30.52
-0.09 (-0.29%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners101.14%
Inst Owner Change0%
Ins Owners9.45%
Ins Owner Change2.74%
Market Cap18.93B
Analysts75.71
Price Target33.84 (10.88%)
Short Float %2.68%
Short Ratio3.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
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)7.35%
PT rev (3m)6.02%
EPS NQ rev (1m)0.32%
EPS NQ rev (3m)2.2%
EPS NY rev (1m)0.02%
EPS NY rev (3m)3.22%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)19.05%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)16.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.75 | ||
| Fwd PE | 12.08 | ||
| P/S | 4.81 | ||
| P/FCF | 15.7 | ||
| P/OCF | 15.5 | ||
| P/B | 8.34 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.84 |
EPS(TTM)2.22
EY7.27%
EPS(NY)2.53
Fwd EY8.28%
FCF(TTM)1.94
FCFY6.37%
OCF(TTM)1.97
OCFY6.45%
SpS6.34
BVpS3.66
TBVpS-16.5
PEG (NY)0.99
PEG (5Y)1.42
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 | 1.37 |
F-Score8
WACC10.57%
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)13.27%
EPS 3Y8.25%
EPS 5Y9.66%
EPS Q2Q%11.32%
EPS Next Y13.85%
EPS Next 2Y12.62%
EPS Next 3Y12%
EPS Next 5Y7.05%
Revenue 1Y (TTM)3.23%
Revenue growth 3Y12.06%
Revenue growth 5Y9.58%
Sales Q2Q%4.45%
Revenue Next Year20.59%
Revenue Next 2Y12.56%
Revenue Next 3Y10.29%
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