Gen Digital benefits from high-margin recurring subscription revenue and an essential software ecosystem. With over 81 million paying subscribers and high customer retention, the platform generates more than $1.5 billion in annual free cash flow with minimal maintenance capital expenditure requirements. The combined scale of its operations creates substantial operational leverage, enabling the firm to preserve 50% operating margins while cross-selling privacy, device optimization, and identity restoration tools across unified architecture.
The company’s disciplined capital-allocation strategy further elevates its investment profile. Excess free cash flow is methodically deployed toward reducing debt balances incurred during major acquisitions while returning steady capital through dividends and buybacks. As artificial intelligence amplifies phishing attacks, fraud, and identity theft, consumer demand for all-in-one digital defense serves as a durable multi-year growth tailwind.
The stock trades at just 10.1 times the company’s forward earnings forecast. That’s an unjustified valuation discount for a premier subscription software business generating 50% operating margins and dependable mid-single-digit top-line growth.
GEN DIGITAL INC. (Nasdaq symbol GEN) makes computer security software and related services under several brands, including Norton, LifeLock, Avast, Avira, AVG and CCleaner.
The stock took a big drop in September 2026 but has since recovered most of that loss.
The decline came on reports that the company plans to make a takeover bid for GoDaddy Inc. (Nasdaq symbol GDDY).
GoDaddy provides domain registration, website hosting, website-building tools and payments services, primarily for small businesses and individual customers. It manages more than 80 million web domains, or nearly 20% of the entire global registered domain market.
Takeover talks are reportedly still in the early stages. Still, GoDaddy would be a good fit for Gen Digital. It would let it bundle and sell its antivirus software to millions of website owners. Notably, GoDaddy began selling Gen Digital’s Norton Small Business software on its platform late last year, and its registry team already handles the technical back end for Norton’s web domain.
Plus, with both companies based in Tempe, Arizona, corporate integration would be easier.
We’ll continue to update our advice as the takeover unfolds, but we think Gen Digital has a bright future going forward—with or without Go Daddy.
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Gen Digital is cheap based on its full-year profit outlook
Gen continues to attract new customers to its cybersecurity services, including Norton, LifeLock, Avast, Avira, AVG and CCleaner.
As of July 3, 2026, the company had about 500 million users, with 81 million of them paying customers, up from 76 million a year ago.
As a result, the company’s revenue in its fiscal 2027 first quarter, ended July 3, 2026, rose 6.3%, to $1.24 billion from $986 million a year earlier. Excluding one-time items, earnings rose 14.6%, to $431 million from $376 million. Due to fewer shares outstanding, per-share earnings gained 18.3%, to $0.71 a share from $0.60.
Gen also continues to spend a high 9% of its revenue on research. That’s letting it develop new AI products to spur its long-term growth.
For example, it has launched a new AI-powered mobile application and web-based service (called Norton Genie) that aims to provide a way to check if texts, emails, websites and social media posts are a scam.
Genie draws from Norton databases and experience to uncover and deal with scams, phishing attacks and unsafe websites. It’s also continually updated to detect new scams and guard against emerging threats.
In fiscal 2027, Gen will probably earn $2.92 a share, and the stock trades at an attractive 10.1 times that forecast. The $0.50 dividend yields 1.7%.
Recommendation in Wall Street Stock Forecaster: Gen Digital Inc. is a buy.
