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 282 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.
GEN had a positive operating cash flow in the past year.
Each year in the past 5 years GEN has been profitable.
GEN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 4.15%, GEN is doing good in the industry, outperforming 74.11% of the companies in the same industry.
GEN has a Return On Equity of 28.34%. This is amongst the best in the industry. GEN outperforms 89.72% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.01%, GEN belongs to the top of the industry, outperforming 80.85% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GEN is significantly below the industry average of 12.17%.
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
With an excellent Profit Margin value of 16.34%, GEN belongs to the best of the industry, outperforming 83.69% of the companies in the same industry.
GEN's Profit Margin has declined in the last couple of years.
GEN has a Operating Margin of 41.17%. This is amongst the best in the industry. GEN outperforms 97.16% of its industry peers.
In the last couple of years the Operating Margin of GEN has grown nicely.
With an excellent Gross Margin value of 80.28%, GEN belongs to the best of the industry, outperforming 81.56% 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.
GEN has less shares outstanding than it did 1 year ago.
The number of shares outstanding for GEN has been increased compared to 5 years ago.
GEN has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.36, we must say that GEN is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of GEN (1.36) is worse than 60.28% of its industry peers.
GEN has a debt to FCF ratio of 6.85. This is a slightly negative value and a sign of low solvency as GEN would need 6.85 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 6.85, GEN is in line with its industry, outperforming 53.90% of the companies in the same industry.
GEN has a Debt/Equity ratio of 3.51. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 3.51, GEN is not doing good in the industry: 82.98% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.51 | ||
| Debt/FCF | 6.85 | ||
| Altman-Z | 1.36 |
ROIC/WACC0.78
WACC10.2%
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.
With a Current ratio value of 0.51, GEN is not doing good in the industry: 90.07% of the companies in the same industry are doing better.
A Quick Ratio of 0.51 indicates that GEN may have some problems paying its short term obligations.
The Quick ratio of GEN (0.51) is worse than 89.36% 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 13.27% 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.
Looking at the last year, GEN shows a small growth in Revenue. The Revenue has grown by 3.23% in the last year.
The Revenue has been growing by 9.58% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 7.05% on average over the next years.
GEN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.50% yearly.
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
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
GEN is valuated correctly with a Price/Earnings ratio of 13.75.
88.30% of the companies in the same industry are more expensive than GEN, based on the Price/Earnings ratio.
GEN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.53.
The Price/Forward Earnings ratio is 12.08, which indicates a correct valuation of GEN.
GEN's Price/Forward Earnings ratio is rather cheap when compared to the industry. GEN is cheaper than 90.07% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.71. GEN is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.75 | ||
| Fwd PE | 12.08 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GEN is valued cheaply inside the industry as 89.72% of the companies are valued more expensively.
GEN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GEN is cheaper than 89.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.7 | ||
| EV/EBITDA | 12.77 |
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.
PEG (NY)0.99
PEG (5Y)1.42
EPS Next 2Y12.62%
EPS Next 3Y12%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.66%, GEN has a reasonable but not impressive dividend return.
GEN's Dividend Yield is rather good when compared to the industry average which is at 30.72. GEN pays more dividend than 95.39% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.34, GEN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
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
+0.23 (+0.76%)
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 %2.89%
Short Ratio3.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
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)4.35%
EPS NQ rev (1m)0.06%
EPS NQ rev (3m)1.94%
EPS NY rev (1m)0.02%
EPS NY rev (3m)3.22%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)19.15%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)16.53%
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 | 12.77 |
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 | 1.36 |
F-Score8
WACC10.2%
ROIC/WACC0.78
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