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What's in the Offing for Gen Digital (GEN) This Earnings Season?
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Gen Digital (GEN - Free Report) is slated to report fourth-quarter fiscal 2024 results on May 9. Gen Digital was formerly known as NortonLifeLock Inc. and was trading under the NLOK ticker symbol.
NortonLifeLock changed its name and ticker symbol, effective from Nov 8, 2022, following the completed merger of NortonLifeLock and Avast Plc. The newly named company unites trusted consumer safety brands, including Norton, Avast, LifeLock, AVG, Avira, CCleaner and ReputationDefender.
The company projects quarterly revenues between $960 million and $970 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $964.8 million, which indicates a 1.9% improvement from the year-ago quarter’s figure of $947 million.
For the fourth quarter of fiscal 2024, Gen Digital expects non-GAAP earnings in the range of 52-54 cents per share. The Zacks Consensus Estimate is pegged at 52 cents per share, which calls for a 13% increase from the year-ago reported figure of 46 cents.
The company’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 1.8%.
Let’s see how things have shaped up before this announcement.
GEN’s fourth-quarter performance is likely to have benefited from the increased demand for cybersecurity and ID analytics solutions in the hybrid work environment. Over the past couple of years, as more people are shifting online, the need for online privacy has been rising. Global workforces working remotely are logging into employers' networks, escalating the need for digital security. This trend is likely to have spurred the demand for Gen Digital’s security products in the fiscal fourth quarter.
Our fourth-quarter estimate for Gen Digital’s Consumer Security segment’s revenues is pegged at $614.6 million, which indicates a year-over-year increase of 2.3%. Our estimate of $333.6 million for the Identity and Information Protection division implies growth of 1.4% from the year-ago quarter.
Gen Digital’s fourth-quarter top line is also likely to have been primarily driven by the inclusion of the Avast business, which significantly increased the combined company’s Average Direct Customer count. Our fourth-quarter estimate for this key metric is pegged at 38.4 million.
Moreover, the expansion of product offerings following the merger of NortonLifeLock and Avast is likely to have facilitated the newly formed company to cross-sell products to each other’s customers, thereby aiding Average Revenue Per User (“ARPU”) growth. Gen Digital’s ARPU increased by 12 cents to $7.21 in the fourth quarter of fiscal 2024 from $7.09 in the year-ago quarter.
We anticipate the trend is likely to have continued in the to-be-reported quarter. Our fourth-quarter fiscal 2024 estimate for ARPU is pegged at $7.32, which is 8 cents higher than the fourth-quarter fiscal 2023 level.
An expansion in the EMEA, Asia Pacific and Latin American regions is also likely to have been an upside for GEN this season. Further, the growing number of client bookings, supported by their retention and renewal rates, is anticipated to have contributed to the company’s fiscal fourth-quarter top line. At the end of the third quarter of fiscal 2024, Gen Digital’s client retention rate was 77%, while bookings grew 4% on a year-over-year basis.
However, GEN’s overall fourth-quarter performance is likely to have been negatively impacted by softening IT spending. Still-high interest rates and protracted inflationary conditions are hurting consumer spending. Meanwhile, enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues.
Additionally, increased interest expenses due to enhanced debt related to Avast acquisition financing are likely to have weighed on the bottom line. Moreover, the company’s earnings per share are expected to be negatively impacted by the equity dilution impact of the Avast acquisition. To finance the acquisition of Avast, Gen Digital issued 94 million new shares.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Gen Digital 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. However, that’s not the case here.
Though GEN currently carries a Zacks Rank of 3, it has an Earnings ESP of -1.92%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, NVIDIA (NVDA - Free Report) , Agilent Technologies (A - Free Report) and Zscaler (ZS - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
NVIDIA carries a Zacks Rank #2 and has an Earnings ESP of +2.50%. The company is scheduled to report first-quarter fiscal 2025 results on May 22. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 20.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s first-quarter earnings stands at $5.49 per share, which indicates a year-over-year improvement of 403.7%. It is estimated to report revenues of $24.17 billion, which suggests an increase of approximately 236.1% from the year-ago quarter.
Agilent Technologies is slated to report second-quarter fiscal 2024 results on May 29. The company has a Zacks Rank #3 and an Earnings ESP of +0.72% at present. Agilent Technologies’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.5%.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.19 per share, which suggests a decrease of 6.3% from the year-ago quarter’s earnings of $1.27. Agilent Technologies’ quarterly revenues are estimated to decline 8% to $1.58 billion from $1.72 billion in the year-ago quarter.
Zscaler carries a Zacks Rank #2 and has an Earnings ESP of +0.39%. The company is expected to report third-quarter fiscal 2024 results on Jun 6. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 28.2%.
The Zacks Consensus Estimate for Zscaler’s second-quarter earnings is pegged at 65 cents per share, which indicates a year-over-year increase of 35.4%. The consensus mark for revenues stands at $535.6 million, which calls for a year-over-year rise of 27.9%.
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What's in the Offing for Gen Digital (GEN) This Earnings Season?
Gen Digital (GEN - Free Report) is slated to report fourth-quarter fiscal 2024 results on May 9. Gen Digital was formerly known as NortonLifeLock Inc. and was trading under the NLOK ticker symbol.
NortonLifeLock changed its name and ticker symbol, effective from Nov 8, 2022, following the completed merger of NortonLifeLock and Avast Plc. The newly named company unites trusted consumer safety brands, including Norton, Avast, LifeLock, AVG, Avira, CCleaner and ReputationDefender.
The company projects quarterly revenues between $960 million and $970 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $964.8 million, which indicates a 1.9% improvement from the year-ago quarter’s figure of $947 million.
For the fourth quarter of fiscal 2024, Gen Digital expects non-GAAP earnings in the range of 52-54 cents per share. The Zacks Consensus Estimate is pegged at 52 cents per share, which calls for a 13% increase from the year-ago reported figure of 46 cents.
The company’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 1.8%.
Let’s see how things have shaped up before this announcement.
Gen Digital Inc. Price and EPS Surprise
Gen Digital Inc. price-eps-surprise | Gen Digital Inc. Quote
Factors to Note
GEN’s fourth-quarter performance is likely to have benefited from the increased demand for cybersecurity and ID analytics solutions in the hybrid work environment. Over the past couple of years, as more people are shifting online, the need for online privacy has been rising. Global workforces working remotely are logging into employers' networks, escalating the need for digital security. This trend is likely to have spurred the demand for Gen Digital’s security products in the fiscal fourth quarter.
Our fourth-quarter estimate for Gen Digital’s Consumer Security segment’s revenues is pegged at $614.6 million, which indicates a year-over-year increase of 2.3%. Our estimate of $333.6 million for the Identity and Information Protection division implies growth of 1.4% from the year-ago quarter.
Gen Digital’s fourth-quarter top line is also likely to have been primarily driven by the inclusion of the Avast business, which significantly increased the combined company’s Average Direct Customer count. Our fourth-quarter estimate for this key metric is pegged at 38.4 million.
Moreover, the expansion of product offerings following the merger of NortonLifeLock and Avast is likely to have facilitated the newly formed company to cross-sell products to each other’s customers, thereby aiding Average Revenue Per User (“ARPU”) growth. Gen Digital’s ARPU increased by 12 cents to $7.21 in the fourth quarter of fiscal 2024 from $7.09 in the year-ago quarter.
We anticipate the trend is likely to have continued in the to-be-reported quarter. Our fourth-quarter fiscal 2024 estimate for ARPU is pegged at $7.32, which is 8 cents higher than the fourth-quarter fiscal 2023 level.
An expansion in the EMEA, Asia Pacific and Latin American regions is also likely to have been an upside for GEN this season. Further, the growing number of client bookings, supported by their retention and renewal rates, is anticipated to have contributed to the company’s fiscal fourth-quarter top line. At the end of the third quarter of fiscal 2024, Gen Digital’s client retention rate was 77%, while bookings grew 4% on a year-over-year basis.
However, GEN’s overall fourth-quarter performance is likely to have been negatively impacted by softening IT spending. Still-high interest rates and protracted inflationary conditions are hurting consumer spending. Meanwhile, enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues.
Additionally, increased interest expenses due to enhanced debt related to Avast acquisition financing are likely to have weighed on the bottom line. Moreover, the company’s earnings per share are expected to be negatively impacted by the equity dilution impact of the Avast acquisition. To finance the acquisition of Avast, Gen Digital issued 94 million new shares.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Gen Digital 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. However, that’s not the case here.
Though GEN currently carries a Zacks Rank of 3, it has an Earnings ESP of -1.92%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, NVIDIA (NVDA - Free Report) , Agilent Technologies (A - Free Report) and Zscaler (ZS - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
NVIDIA carries a Zacks Rank #2 and has an Earnings ESP of +2.50%. The company is scheduled to report first-quarter fiscal 2025 results on May 22. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 20.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s first-quarter earnings stands at $5.49 per share, which indicates a year-over-year improvement of 403.7%. It is estimated to report revenues of $24.17 billion, which suggests an increase of approximately 236.1% from the year-ago quarter.
Agilent Technologies is slated to report second-quarter fiscal 2024 results on May 29. The company has a Zacks Rank #3 and an Earnings ESP of +0.72% at present. Agilent Technologies’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.5%.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.19 per share, which suggests a decrease of 6.3% from the year-ago quarter’s earnings of $1.27. Agilent Technologies’ quarterly revenues are estimated to decline 8% to $1.58 billion from $1.72 billion in the year-ago quarter.
Zscaler carries a Zacks Rank #2 and has an Earnings ESP of +0.39%. The company is expected to report third-quarter fiscal 2024 results on Jun 6. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 28.2%.
The Zacks Consensus Estimate for Zscaler’s second-quarter earnings is pegged at 65 cents per share, which indicates a year-over-year increase of 35.4%. The consensus mark for revenues stands at $535.6 million, which calls for a year-over-year rise of 27.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.