GEN DIGITAL INC (GEN)
US6687711084 - Common Stock
We assign a fundamental rating of 5 out of 10 to GEN. GEN was compared to 279 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.
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
GEN has a Return On Assets of 4.01%. This is in the better half of the industry: GEN outperforms 73.48% of its industry peers.
With an excellent Return On Equity value of 29.55%, GEN belongs to the best of the industry, outperforming 91.76% of the companies in the same industry.
The Return On Invested Capital of GEN (10.71%) is better than 88.53% 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 11.44%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.01% | ||
| ROE | 29.55% | ||
| ROIC | 10.71% |
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 has a Profit Margin of 16.07%. This is amongst the best in the industry. GEN outperforms 83.87% of its industry peers.
GEN's Profit Margin has improved in the last couple of years.
GEN's Operating Margin of 40.94% is amongst the best of the industry. GEN outperforms 98.21% of its industry peers.
In the last couple of years the Operating Margin of GEN has grown nicely.
GEN has a better Gross Margin (80.40%) than 81.00% 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 | 40.94% | ||
| PM (TTM) | 16.07% | ||
| GM | 80.4% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so GEN is still creating some value.
Compared to 1 year ago, GEN has less shares outstanding
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
Based on the Altman-Z score of 1.21, we must say that GEN is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.21, GEN is doing worse than 63.80% of the companies in the same industry.
The Debt to FCF ratio of GEN is 4.02, which is a neutral value as it means it would take GEN, 4.02 years of fcf income to pay off all of its debts.
GEN's Debt to FCF ratio of 4.02 is in line compared to the rest of the industry. GEN outperforms 59.14% of its industry peers.
GEN has a Debt/Equity ratio of 3.40. This is a high value indicating a heavy dependency on external financing.
GEN has a Debt to Equity ratio of 3.40. This is amonst the worse of the industry: GEN underperforms 85.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.4 | ||
| Debt/FCF | 4.02 | ||
| Altman-Z | 1.21 |
ROIC/WACC0.92
WACC11.58%
2.3 Liquidity
A Current Ratio of 0.32 indicates that GEN may have some problems paying its short term obligations.
With a Current ratio value of 0.32, GEN is not doing good in the industry: 96.42% of the companies in the same industry are doing better.
GEN has a Quick Ratio of 0.32. 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 Quick ratio of 0.32 is on the low side compared to the rest of the industry. GEN is outperformed by 96.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.32 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
GEN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.97%, which is quite good.
The Earnings Per Share has been growing slightly by 4.27% on average over the past years.
The Revenue has been growing slightly by 2.12% in the past year.
The Revenue has been growing by 9.19% on average over the past years. This is quite good.
EPS 1Y (TTM)12.97%
EPS 3Y10.57%
EPS 5Y4.27%
EPS Q2Q%14.89%
Revenue 1Y (TTM)2.12%
Revenue growth 3Y14.33%
Revenue growth 5Y9.19%
Sales Q2Q%2.74%
3.2 Future
GEN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.52% yearly.
Based on estimates for the next years, GEN will show a small growth in Revenue. The Revenue will grow by 2.43% on average per year.
EPS Next Y13.26%
EPS Next 2Y12.34%
EPS Next 3Y11.36%
EPS Next 5Y10.52%
Revenue Next Year2.91%
Revenue Next 2Y3.13%
Revenue Next 3Y3.11%
Revenue Next 5Y2.43%
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 14.01 indicates a correct valuation of GEN.
89.61% of the companies in the same industry are more expensive than GEN, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.65. GEN is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 11.84 indicates a reasonable valuation of GEN.
GEN's Price/Forward Earnings ratio is rather cheap when compared to the industry. GEN is cheaper than 91.04% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.50. GEN is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.01 | ||
| Fwd PE | 11.84 |
4.2 Price Multiples
GEN's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GEN is cheaper than 88.89% of the companies 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 96.77% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.51 | ||
| EV/EBITDA | 12.85 |
4.3 Compensation for Growth
GEN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of GEN may justify a higher PE ratio.
PEG (NY)1.06
PEG (5Y)3.28
EPS Next 2Y12.34%
EPS Next 3Y11.36%
5. Dividend
5.1 Amount
GEN has a Yearly Dividend Yield of 1.66%. Purely for dividend investing, there may be better candidates out there.
GEN's Dividend Yield is rather good when compared to the industry average which is at 11.82. GEN pays more dividend than 94.98% of the companies in the same industry.
GEN's Dividend Yield is slightly below the S&P500 average, which is at 2.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
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 decreased its dividend in the last 3 years.
Dividend Growth(5Y)8.13%
Div Incr Years0
Div Non Decr Years2
5.3 Sustainability
GEN pays out 51.29% of its income as dividend. This is a bit on the high side, but may be sustainable.
GEN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP51.29%
EPS Next 2Y12.34%
EPS Next 3Y11.36%
GEN DIGITAL INC
NASDAQ:GEN (11/18/2024, 8:00:01 PM)
After market: 29.28 0 (0%)29.28
-0.3 (-1.01%)
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 Cap18.04B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(8)
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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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.01 | ||
| Fwd PE | 11.84 | ||
| 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)1.06
PEG (5Y)3.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.01% | ||
| ROE | 29.55% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 40.94% | ||
| PM (TTM) | 16.07% | ||
| GM | 80.4% | ||
| 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 Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.4 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.32 | ||
| Quick Ratio | 0.32 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)12.97%
EPS 3Y10.57%
EPS 5Y
EPS Q2Q%
EPS Next Y13.26%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.12%
Revenue growth 3Y14.33%
Revenue growth 5Y
Sales 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