GEN DIGITAL INC (GEN) Stock Fundamental Analysis
NASDAQ:GEN - Nasdaq - US6687711084 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to GEN. GEN was compared to 285 industry peers in the Software industry. While GEN has a great profitability rating, there are quite some concerns on its financial health. GEN scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
GEN had positive earnings in the past year.
In the past year GEN had a positive cash flow from operations.
Each year in the past 5 years GEN has been profitable.
GEN had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of GEN (4.13%) is better than 72.98% of its industry peers.
GEN has a better Return On Equity (29.52%) than 90.53% of its industry peers.
GEN has a better Return On Invested Capital (11.02%) than 88.42% of its industry peers.
GEN had an Average Return On Invested Capital over the past 3 years of 12.02%. This is in line with the industry average of 11.25%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.13% | ||
| ROE | 29.52% | ||
| ROIC | 11.02% |
ROA(3y)8.13%
ROA(5y)16.67%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.02%
ROIC(5y)13.04%
1.3 Margins
GEN's Profit Margin of 16.32% is amongst the best of the industry. GEN outperforms 80.70% of its industry peers.
GEN's Profit Margin has improved in the last couple of years.
GEN's Operating Margin of 41.57% is amongst the best of the industry. GEN outperforms 97.54% of its industry peers.
In the last couple of years the Operating Margin of GEN has grown nicely.
Looking at the Gross Margin, with a value of 80.29%, GEN belongs to the top of the industry, outperforming 82.11% of the companies in the same industry.
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 | 41.57% | ||
| PM (TTM) | 16.32% | ||
| GM | 80.29% |
OM growth 3Y-9%
OM growth 5Y14.92%
PM growth 3Y-9.38%
PM growth 5Y66.52%
GM growth 3Y-1.98%
GM growth 5Y-0.16%
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.
The number of shares outstanding for GEN has been reduced compared to 1 year ago.
The number of shares outstanding for GEN has been reduced compared to 5 years ago.
GEN has a better debt/assets ratio than last year.
2.2 Solvency
GEN has an Altman-Z score of 1.11. This is a bad value and indicates that GEN is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of GEN (1.11) is comparable to the rest of the industry.
GEN has a debt to FCF ratio of 3.98. This is a good value and a sign of high solvency as GEN would need 3.98 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.98, GEN is doing good in the industry, outperforming 60.35% of the companies in the same industry.
GEN has a Debt/Equity ratio of 3.29. This is a high value indicating a heavy dependency on external financing.
GEN has a Debt to Equity ratio of 3.29. This is amonst the worse of the industry: GEN underperforms 81.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.29 | ||
| Debt/FCF | 3.98 | ||
| Altman-Z | 1.11 |
ROIC/WACC1.03
WACC10.71%
2.3 Liquidity
A Current Ratio of 0.35 indicates that GEN may have some problems paying its short term obligations.
With a Current ratio value of 0.35, GEN is not doing good in the industry: 92.28% of the companies in the same industry are doing better.
GEN has a Quick Ratio of 0.35. 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 worse Quick ratio (0.35) than 92.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.35 |
3. Growth
3.1 Past
GEN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.29%, which is quite good.
The Earnings Per Share has been growing slightly by 4.27% on average over the past years.
GEN shows a small growth in Revenue. In the last year, the Revenue has grown by 2.64%.
Measured over the past years, GEN shows a quite strong growth in Revenue. The Revenue has been growing by 9.19% on average per year.
EPS 1Y (TTM)14.29%
EPS 3Y10.57%
EPS 5Y4.27%
EPS Q2Q%14.29%
Revenue 1Y (TTM)2.64%
Revenue growth 3Y14.33%
Revenue growth 5Y9.19%
Sales Q2Q%3.68%
3.2 Future
Based on estimates for the next years, GEN will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.10% on average per year.
GEN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.58% yearly.
EPS Next Y13.94%
EPS Next 2Y11.77%
EPS Next 3Y10.88%
EPS Next 5Y9.1%
Revenue Next Year2.99%
Revenue Next 2Y3.22%
Revenue Next 3Y3.22%
Revenue Next 5Y2.58%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
A Price/Earnings ratio of 11.32 indicates a reasonable valuation of GEN.
Based on the Price/Earnings ratio, GEN is valued cheaply inside the industry as 87.37% of the companies are valued more expensively.
GEN is valuated cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
GEN is valuated reasonably with a Price/Forward Earnings ratio of 9.99.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GEN indicates a rather cheap valuation: GEN is cheaper than 92.28% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, GEN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.32 | ||
| Fwd PE | 9.99 |
4.2 Price Multiples
89.82% of the companies in the same industry are more expensive than GEN, based on the Enterprise Value to EBITDA ratio.
GEN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GEN is cheaper than 96.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.07 | ||
| EV/EBITDA | 11.09 |
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)0.81
PEG (5Y)2.65
EPS Next 2Y11.77%
EPS Next 3Y10.88%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 2.04%.
Compared to an average industry Dividend Yield of 14.87, GEN pays a better dividend. On top of this GEN pays more dividend than 95.79% of the companies listed in the same industry.
GEN's Dividend Yield is comparable with the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
5.2 History
On average, the dividend of GEN grows each year by 8.13%, which is quite nice.
GEN has paid a dividend for at least 10 years, which is a reliable track record.
GEN has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)8.13%
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
GEN pays out 49.45% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of GEN is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP49.45%
EPS Next 2Y11.77%
EPS Next 3Y10.88%
24.45
+0.15 (+0.62%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.59%
Inst Owner Change0%
Ins Owners9.43%
Ins Owner Change-0.2%
Market Cap15.07B
Analysts74.29
Price Target32.43 (32.64%)
Short Float %3.15%
Short Ratio5.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
Yearly Dividend0.51
Dividend Growth(5Y)8.13%
DP49.45%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.22%
Min EPS beat(2)-0.99%
Max EPS beat(2)0.55%
EPS beat(4)2
Avg EPS beat(4)0.12%
Min EPS beat(4)-0.99%
Max EPS beat(4)1.3%
EPS beat(8)4
Avg EPS beat(8)0.27%
EPS beat(12)8
Avg EPS beat(12)1.08%
EPS beat(16)12
Avg EPS beat(16)1.25%
Revenue beat(2)0
Avg Revenue beat(2)-0.74%
Min Revenue beat(2)-0.9%
Max Revenue beat(2)-0.57%
Revenue beat(4)0
Avg Revenue beat(4)-0.81%
Min Revenue beat(4)-1%
Max Revenue beat(4)-0.57%
Revenue beat(8)0
Avg Revenue beat(8)-0.82%
Revenue beat(12)1
Avg Revenue beat(12)-0.24%
Revenue beat(16)2
Avg Revenue beat(16)-0.31%
PT rev (1m)0.06%
PT rev (3m)-0.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.64%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)0.42%
Revenue NQ rev (1m)-0.1%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.32 | ||
| Fwd PE | 9.99 | ||
| P/S | 3.87 | ||
| P/FCF | 7.07 | ||
| P/OCF | 7.02 | ||
| P/B | 7.01 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.09 |
EPS(TTM)2.16
EY8.83%
EPS(NY)2.45
Fwd EY10.01%
FCF(TTM)3.46
FCFY14.14%
OCF(TTM)3.48
OCFY14.24%
SpS6.32
BVpS3.49
TBVpS-16.8
PEG (NY)0.81
PEG (5Y)2.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.13% | ||
| ROE | 29.52% | ||
| ROCE | 13.95% | ||
| ROIC | 11.02% | ||
| ROICexc | 11.93% | ||
| ROICexgc | N/A | ||
| OM | 41.57% | ||
| PM (TTM) | 16.32% | ||
| GM | 80.29% | ||
| FCFM | 54.75% |
ROA(3y)8.13%
ROA(5y)16.67%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)12.02%
ROIC(5y)13.04%
ROICexc(3y)19.03%
ROICexc(5y)19.92%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)15.21%
ROCE(5y)16.51%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-32.93%
ROICexc growth 5Y20.86%
OM growth 3Y-9%
OM growth 5Y14.92%
PM growth 3Y-9.38%
PM growth 5Y66.52%
GM growth 3Y-1.98%
GM growth 5Y-0.16%
F-Score6
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.29 | ||
| Debt/FCF | 3.98 | ||
| Debt/EBITDA | 3.46 | ||
| Cap/Depr | 3.52% | ||
| Cap/Sales | 0.39% | ||
| Interest Coverage | 2.87 | ||
| Cash Conversion | 104.99% | ||
| Profit Quality | 335.59% | ||
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.35 | ||
| Altman-Z | 1.11 |
F-Score6
WACC10.71%
ROIC/WACC1.03
Cap/Depr(3y)3.41%
Cap/Depr(5y)7.78%
Cap/Sales(3y)0.31%
Cap/Sales(5y)0.95%
Profit Quality(3y)167.76%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)14.29%
EPS 3Y10.57%
EPS 5Y4.27%
EPS Q2Q%14.29%
EPS Next Y13.94%
EPS Next 2Y11.77%
EPS Next 3Y10.88%
EPS Next 5Y9.1%
Revenue 1Y (TTM)2.64%
Revenue growth 3Y14.33%
Revenue growth 5Y9.19%
Sales Q2Q%3.68%
Revenue Next Year2.99%
Revenue Next 2Y3.22%
Revenue Next 3Y3.22%
Revenue Next 5Y2.58%
EBIT growth 1Y43.31%
EBIT growth 3Y4.04%
EBIT growth 5Y25.48%
EBIT Next Year4.45%
EBIT Next 3Y4.95%
EBIT Next 5Y3.48%
FCF growth 1Y183.38%
FCF growth 3Y42.93%
FCF growth 5Y9.68%
OCF growth 1Y182.74%
OCF growth 3Y42.99%
OCF growth 5Y6.66%