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NortonLifeLock (NLOK) to Report Q3 Earnings: What's in Store?

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NortonLifeLock is scheduled to release third-quarter fiscal 2021 results on Feb 4.

The company projects quarterly revenues between $625 million and $635 million. The Zacks Consensus Estimate for revenues is pegged at $630.2 million, calling for a year-over-year decrease of 2.9%.

The company projects non-GAAP earnings from continuing operations between 36 cents and 38 cents per share. The Zacks Consensus Estimate is pegged at 37 cents per share, suggesting a whopping 48% year-over-year jump.

The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 76.5%.

NortonLifeLock Inc. Price and EPS Surprise

NortonLifeLock Inc. Price and EPS Surprise

NortonLifeLock Inc. price-eps-surprise | NortonLifeLock Inc. Quote

Let’s see how things have shaped up prior to the upcoming announcement.

Factors at Play

NortonLifeLock’s fiscal third-quarter results are likely to reflect benefits from increased demand for cybersecurity and ID analytics solutions amid the COVID-19 pandemic-led work-from-home and online-learning wave.

Notably, a huge global workforce has been working remotely in order to contain the spread of the COVID-19 pandemic. However, more people logging into employers' networks requires greater security. This trend is likely to have spurred demand for the company’s products during the fiscal third quarter.

Moreover, the fiscal third-quarter performance is likely to have benefited from the expansion of its Norton 360 memberships to more countries in the EMEA, Asia Pacific and Latin American regions, in a bid to offer a broader range of cyber safety products.

Apart from these, strong client retention and renewal rates are anticipated to have aided its fiscal third-quarter top-line performance. At the end of the fiscal second quarter, NortonLifeLock’s client-retention rate was 85%. The Norton antivirus maker’s sustained focus on growing partner channel and employee benefit programs is expected to have boosted its performance during the quarter under review.

Nonetheless, NortonLifeLock’s quarterly results will likely reflect the negative impact of revenue losses due to the divestment of the company’s enterprise security asset to Broadcom (AVGO) and ID Analytics business to LexisNexis Risk Solutions, part of RELX Plc (RELX).

What Our Model Says

Our proven model does not predict an earnings beat for NortonLifeLock this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

NortonLifeLock currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

CDW Corporation (CDW - Free Report) has an Earnings ESP of +6.74% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Materials, Inc. (AMAT - Free Report) has an Earnings ESP of +2.54% and holds a Zacks Rank of 3 currently.

Equifax, Inc. (EFX - Free Report) has an Earnings ESP of +1.44% and carries a Zacks Rank #3, at present.

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