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 284 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 may be a bit undervalued, certainly considering the very reasonable score on growth
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 each of the past 5 years.
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 73.19% of its industry peers.
Looking at the Return On Equity, with a value of 29.52%, GEN belongs to the top of the industry, outperforming 90.94% of the companies in the same industry.
GEN has a better Return On Invested Capital (11.02%) than 87.68% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GEN is in line with the industry average of 11.91%.
| 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
The Profit Margin of GEN (16.32%) is better than 83.33% of its industry peers.
GEN's Profit Margin has improved in the last couple of years.
The Operating Margin of GEN (41.57%) is better than 97.46% of its industry peers.
In the last couple of years the Operating Margin of GEN has grown nicely.
GEN has a Gross Margin of 80.29%. This is amongst the best in the industry. GEN outperforms 80.43% 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 | 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) below the Cost of Capital (WACC), GEN is destroying value.
The number of shares outstanding for GEN has been reduced compared to 1 year ago.
GEN has less shares outstanding than it did 5 years ago.
GEN has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.19, we must say that GEN is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of GEN (1.19) is worse than 63.77% of its industry peers.
The Debt to FCF ratio of GEN is 3.98, which is a good value as it means it would take GEN, 3.98 years of fcf income to pay off all of its debts.
GEN has a Debt to FCF ratio of 3.98. This is comparable to the rest of the industry: GEN outperforms 59.78% of its industry peers.
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 85.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.29 | ||
| Debt/FCF | 3.98 | ||
| Altman-Z | 1.19 |
ROIC/WACC0.9
WACC12.18%
2.3 Liquidity
A Current Ratio of 0.35 indicates that GEN may have some problems paying its short term obligations.
GEN's Current ratio of 0.35 is on the low side compared to the rest of the industry. GEN is outperformed by 96.01% of its industry peers.
A Quick Ratio of 0.35 indicates that GEN may have some problems paying its short term obligations.
GEN has a worse Quick ratio (0.35) than 96.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.29% over the past year.
GEN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.27% yearly.
Looking at the last year, GEN shows a small growth in Revenue. The Revenue has grown by 2.64% in the last year.
The Revenue has been growing by 9.19% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 8.59% on average over the next years. This is quite good.
Based on estimates for the next years, GEN will show a small growth in Revenue. The Revenue will grow by 2.16% on average per year.
EPS Next Y14.03%
EPS Next 2Y11.93%
EPS Next 3Y11.06%
EPS Next 5Y8.59%
Revenue Next Year2.99%
Revenue Next 2Y3.21%
Revenue Next 3Y3.21%
Revenue Next 5Y2.16%
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 accelerating.
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
A Price/Earnings ratio of 12.52 indicates a correct valuation of GEN.
GEN's Price/Earnings ratio is rather cheap when compared to the industry. GEN is cheaper than 91.30% of the companies in the same industry.
GEN is valuated cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 11.01, the valuation of GEN can be described as reasonable.
Based on the Price/Forward Earnings ratio, GEN is valued cheaper than 93.48% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.68. GEN is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.52 | ||
| Fwd PE | 11.01 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GEN is valued cheaper than 92.75% of the companies in the same industry.
96.74% of the companies in the same industry are more expensive than GEN, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.82 | ||
| EV/EBITDA | 11.95 |
4.3 Compensation for Growth
The 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)0.89
PEG (5Y)2.93
EPS Next 2Y11.93%
EPS Next 3Y11.06%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 1.78%.
GEN's Dividend Yield is rather good when compared to the industry average which is at 12.71. GEN pays more dividend than 94.57% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.29, GEN is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.78% |
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.
GEN's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP49.45%
EPS Next 2Y11.93%
EPS Next 3Y11.06%
27.05
-0.27 (-0.99%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners87.84%
Inst Owner Change0%
Ins Owners9.26%
Ins Owner Change-0.73%
Market Cap16.67B
Analysts74.29
Price Target32.66 (20.74%)
Short Float %2.92%
Short Ratio4.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.78% |
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)0.16%
PT rev (3m)17.1%
EPS NQ rev (1m)0.64%
EPS NQ rev (3m)-0.58%
EPS NY rev (1m)0.5%
EPS NY rev (3m)0.68%
Revenue NQ rev (1m)0.3%
Revenue NQ rev (3m)0.1%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.52 | ||
| Fwd PE | 11.01 | ||
| P/S | 4.28 | ||
| P/FCF | 7.82 | ||
| P/OCF | 7.77 | ||
| P/B | 7.75 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.95 |
EPS(TTM)2.16
EY7.99%
EPS(NY)2.46
Fwd EY9.08%
FCF(TTM)3.46
FCFY12.78%
OCF(TTM)3.48
OCFY12.87%
SpS6.32
BVpS3.49
TBVpS-16.8
PEG (NY)0.89
PEG (5Y)2.93
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 | 1.19 |
F-Score6
WACC12.18%
ROIC/WACC0.9
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 Y14.03%
EPS Next 2Y11.93%
EPS Next 3Y11.06%
EPS Next 5Y8.59%
Revenue 1Y (TTM)2.64%
Revenue growth 3Y14.33%
Revenue growth 5Y9.19%
Sales Q2Q%3.68%
Revenue Next Year2.99%
Revenue Next 2Y3.21%
Revenue Next 3Y3.21%
Revenue Next 5Y2.16%
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%