Symantec Corporation is benefiting from continued strength in its consumer security business, which is being driven by a powerful product portfolio comprising Norton and Lifelock products.
The company boasts an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing four reported quarters, the average being 14.17%.
Moreover, Symantec reiterated its guidance for full-fiscal 2019, which is a positive.
With expected long-term earnings per share growth rate of 7.9% and a market cap of $12.07 billion, investors need to consider retaining the stock in their portfolio for long-term gains.
Let’s delve deeper and analyze Symantec’s prospects.
Symantec Corporation Price and Consensus
Growth Drivers
Symantec has been making significant progress on capitalizing the growing opportunity in the cybersecurity market, making us optimistic about its prospects. We note that cybersecurity has become a mission-critical, high-profile requirement given the growing exposure of enterprises to sophisticated cyber threats.
Notably, per MarketsandMarkets, the global cybersecurity market is expected to reach $248.3 billion by 2023, reflecting a CAGR of 10.2% through 2018 to 2023.
As incidences of high-profile cybercrimes and cyber warfare continue to grow, demand for stronger cyber security solutions and products are becoming vital for businesses and individuals alike. To address this growing concern, Symantec is taking initiatives to enhance its products. Integrated Cyber Defense Platform, which drives significant cross-sell and up-sell opportunities is a key driver. Moreover, key customer wins for Cloud Proxy, Cloud Access Security Broker, and cloud e-mail offerings are a positive.
Symantec is benefiting from strong growth in Consumer Digital Safety segment. Improvement in ARPU (average revenue per user) on the back of successful cross-sell, and better retention rate for its direct customer base are key positives.
Symantec has also been actively taking up strategic partnerships to enhance its cyber security solutions. Recently it joined forces with Aon plc to develop a solution to protect the assets of high-net-worth individuals against cyber hacking. This will also boost Symantec’s Consumer Security segment, which builds on its Norton and Lifelock product portfolio.
Moreover, its recent expansion of partnership with Fortinet has strengthened its portfolio. The agglomeration of both the companies’ technologies is expected to result in a comprehensive suite of stronger cloud-delivered cybercrime prevention solutions. This will help Symantec reach out to a wider customer base.
More importantly, Symantec has been returning cash through share repurchases and dividend payments. It had returned a total of $722 million through share repurchases and dividend payments in fiscal 2017. In fiscal 2018, the company has paid $211 million as dividend. These activities not only boost investor confidence but also provide support to earnings.
Zacks Rank & Stock to Consider
Symantec currently has a Zacks Rank #3 (Hold).
A better-ranked stock in the broader Computer and Technology sector is Synopsys, Inc.
Long-term earnings growth rate for Synopsys is projected to be 10%.
