Cybersecurity is the practice of defending computers, servers, mobile devices, electronic systems, networks, and data from malicious attacks such as malware and phishing.
Notably, attacks are being launched with greater frequency and complexity, which will need to be matched by more sophisticated cyber defences.
As a result, there’s a strong opportunity for cybersecurity companies like Gen Digital to grow.
This long-term pick’s shares jumped in early May 2024 (and have kept rising) when it reported stronger results in the latest quarter and boosted its stock-buyback authorization. As well, the company has attracted further investor interest with its artificial intelligence (AI) initiatives. We think this Power Buy is poised to keep moving even higher for you.
The stock trades at just 12.2 times the company’s forward earnings forecast.
GEN DIGITAL INC. (Nasdaq symbol GEN; www.gendigital.com) changed its name from NortonLifeLock (old symbol NLOK) following its September 2022 acquisition of European cybersecurity firm Avast plc for $8.1 billion.
Gen is now the parent company for several security-related brands, including Norton, LifeLock, and Avast, in addition to Avira, AVG, and CCleaner; those last three were obtained in previous acquisitions.
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Gen Digital is dually headquartered in Tempe, Arizona, and Prague, Czech Republic, following its acquisition of Avast. Its stated purpose is to “power Digital Freedom for people everywhere.”
Overall, the company now gets about 64% of its revenue from consumer security solutions such as Norton 360 Security, Avast Security offerings, Norton Secure VPN, Avira Security and other consumer-focused security services. The remaining 36% of revenues comes mostly from identity and information protection marketed as Norton 360, alongside LifeLock, LifeLock, and other privacy offerings.
Approximately 65% of Gen Digital’s revenue is from the Americas, 24% from Europe and 11% from the Asia-Pacific region.
Growth Stocks: Earnings jump significantly as AI keeps the firm moving forward
Gen continues to attract new customers. As a result, overall revenue in its fiscal 2025 first quarter, ended June 28, 2024, rose 2.3% to $965 million from $943 million a year earlier. Earnings before one-time items rose 10.6%, to $335 million, or $0.53 a share, from $303 million, or $0.47 a share.
Meanwhile, Gen continues to spend a high 9% of its revenue on research. That’s letting it develop new products to spur its long-term growth.
For example, it recently 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.
Gen Digital recently authorized a new share-repurchase target of $3 billion. As of June 28, 2024, it still had $2.728 billion remaining under that authorization.
For all of fiscal 2025, Gen will probably earn $2.22 a share, and the stock trades at an attractive 12.2 times that forecast.
The company last raised its quarterly dividend by 66.7% in December 2019. The annual rate of $0.50 a share yields 1.9%.
Gen’s TSI Dividend Sustainability Rating is Average.
Recommendation in Wall Street Stock Forecaster: Gen Digital Inc. is a buy.
