NORTONLIFELOCK INC (NLOK)

US6687711084 - Common Stock

21.66  -0.5 (-2.26%)

After market: 21.66 0 (0%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to NLOK. NLOK was compared to 279 industry peers in the Software industry. Both the profitability and financial health of NLOK have multiple concerns. NLOK is valied quite expensively at the moment, while it does show a decent growth rate.



3

1. Profitability

1.1 Basic Checks

NLOK had positive earnings in the past year.
NLOK had a positive operating cash flow in the past year.
Each year in the past 5 years NLOK has been profitable.
NLOK had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

Industry RankSector Rank
ROA 3.72%
ROE 34.81%
ROIC 5.9%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A

1.3 Margins

In the last couple of years the Profit Margin of NLOK has grown nicely.
In the last couple of years the Operating Margin of NLOK has grown nicely.
Industry RankSector Rank
OM 33.52%
PM (TTM) 20.57%
GM N/A
OM growth 3Y33.91%
OM growth 5Y53.81%
PM growth 3Y187.2%
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A

1

2. Health

2.1 Basic Checks

NLOK has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, NLOK has more shares outstanding
NLOK has less shares outstanding than it did 5 years ago.
The debt/assets ratio for NLOK has been reduced compared to a year ago.

2.2 Solvency

NLOK has an Altman-Z score of 0.75. This is a bad value and indicates that NLOK is not financially healthy and even has some risk of bankruptcy.
The Debt to FCF ratio of NLOK is 12.98, which is on the high side as it means it would take NLOK, 12.98 years of fcf income to pay off all of its debts.
NLOK has a Debt/Equity ratio of 5.82. This is a high value indicating a heavy dependency on external financing.
Industry RankSector Rank
Debt/Equity 5.82
Debt/FCF 12.98
Altman-Z 0.75
ROIC/WACC0.8
WACC7.39%

2.3 Liquidity

A Current Ratio of 0.57 indicates that NLOK may have some problems paying its short term obligations.
A Quick Ratio of 0.57 indicates that NLOK may have some problems paying its short term obligations.
Industry RankSector Rank
Current Ratio 0.57
Quick Ratio 0.57

4

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 10.43% over the past year.
The Earnings Per Share has been growing by 8.02% on average over the past years. This is quite good.
The Revenue has been growing slightly by 6.84% in the past year.
NLOK shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -7.00% yearly.
EPS 1Y (TTM)10.43%
EPS 3Y3.25%
EPS 5Y8.02%
EPS growth Q2Q4.65%
Revenue 1Y (TTM)6.84%
Revenue growth 3Y4.42%
Revenue growth 5Y-7%
Revenue growth Q2Q8.09%

3.2 Future

Based on estimates for the next years, NLOK will show a small growth in Earnings Per Share. The EPS will grow by 7.98% on average per year.
NLOK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.64% yearly.
EPS Next Y6.2%
EPS Next 2Y7.23%
EPS Next 3Y8.03%
EPS Next 5Y7.98%
Revenue Next Year5.5%
Revenue Next 2Y6.79%
Revenue Next 3Y6.75%
Revenue Next 5Y4.64%

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 stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

2

4. Valuation

4.1 Price/Earnings Ratio

NLOK is valuated correctly with a Price/Earnings ratio of 12.03.
When comparing the Price/Earnings ratio of NLOK to the average of the S&P500 Index (26.42), we can say NLOK is valued rather cheaply.
The Price/Forward Earnings ratio is 10.76, which indicates a very decent valuation of NLOK.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.74, NLOK is valued rather cheaply.
Industry RankSector Rank
PE 12.03
Fwd PE 10.76

4.2 Price Multiples

Industry RankSector Rank
P/FCF 18.47
EV/EBITDA 20.97

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NLOK does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)1.94
PEG (5Y)1.5
EPS Next 2Y7.23%
EPS Next 3Y8.03%

4

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.26%, NLOK has a reasonable but not impressive dividend return.
Compared to an average S&P500 Dividend Yield of 2.34, NLOK has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.26%

5.2 History

The dividend of NLOK is nicely growing with an annual growth rate of 18.56%!
NLOK has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)18.56%
Div Incr YearsN/A
Div Non Decr YearsN/A

5.3 Sustainability

50.59% of the earnings are spent on dividend by NLOK. This is a bit on the high side, but may be sustainable.
The dividend of NLOK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP50.59%
EPS Next 2Y7.23%
EPS Next 3Y8.03%

NORTONLIFELOCK INC

NASDAQ:NLOK (11/7/2022, 7:00:02 PM)

After market: 21.66 0 (0%)

21.66

-0.5 (-2.26%)

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 Cap14.32B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.26%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 12.03
Fwd PE 10.76
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)1.94
PEG (5Y)1.5
Profitability
Industry RankSector Rank
ROA 3.72%
ROE 34.81%
ROCE
ROIC
ROICexc
ROICexgc
OM 33.52%
PM (TTM) 20.57%
GM N/A
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 Turnover0.18
Health
Industry RankSector Rank
Debt/Equity 5.82
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.57
Quick Ratio 0.57
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)10.43%
EPS 3Y3.25%
EPS 5Y
EPS growth Q2Q
EPS Next Y6.2%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.84%
Revenue growth 3Y4.42%
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