Asset Structure Analysis
Gen Digital’s total assets were $15.77 billion at March 29, 2024, down from $16 billion at March 31.
Goodwill was $10.2 billion at March 29, 2024, accounting for 64.7% of total assets.
Intangible assets, net were $2.64 billion at March 29, 2024, making up 16.7% of total assets.
The amount of goodwill is very huge, which inflate the size of Gen Digital’s total assets.
Total current assets were $1.36 billion at March 29, 2024, consisting of 8.6% of total assets.
Among total current assets, cash and cash equivalents were $846 million.
Liquidity and Solvency
Total current liabilities were $2.65 billion at March 29, 2024.
The current ratio was 51.3% for fiscal 2024.
Among total current liabilities, contract liabilities were $1.73 billion, which dose not give rise cash outflow, so Gen Digital’s liquidity is not a question.
Total liabilities were $13.6 billion at March 29, 2024.
The debt ratio was 86.2% for fiscal 2024.
With a mass goodwill, the debt ratio is undervalued.
Profitability Analysis
Gen Digital’s revenues were $3.8 billion, $3.3 billion and $2.8 billion in fiscal 2024, 2023 and 2022, respectively.
Operating income was $1.1 billion, $1.2 billion and $1 billion in fiscal 2024, 2023 and 2022, respectively.
The operating profit margin was 28.9%, 36.4% and 35.7% for fiscal 2024, 2023 and 2022, respectively.
Interest expense was $669 million, $401 million and $126 million in fiscal 2024, 2023 and 2022, respectively.
Net income was $616 million, 1.35 billion and $836 million in fiscal 2024, 2023 and 2022, respectively.
We think that the operating profit margin is very high, but the interest expense reflect a high level of debt.
Cash Flow Analysis
Net cash provided by operating activities was $2 billion, $757 million and $974 million in fiscal 2024, 2023 and 2022, respectively.
Dividends and dividends equivalents paid were $323 million, $314 million and $303 million in fiscal 2024, 2023 and 2022, respectively.
Repurchases of common stock were $441 million and $904 million in fiscal 2024 and 2023, respectively.
Gen Digital’s capital returned to shareholders was $764 million, $1.2 billion and $303 million in fiscal 2024, 2023 and 2022, respectively.
Given that Gen Digital’s debt pressure, Gen Digital’s capital returned to shareholders may be reduced.
Conclusion
We reckon that Gen Digital’s reasonable valuation is about $9 billion, while Gen Digital’s market capitalization is $15.37 billion, which is equivalent to $24.13 per share.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
Gen is a global company powering Digital Freedom with a family of trusted consumer brands including Norton, Avast, LifeLock, Avira, AVG, ReputationDefender and CCleaner. Our core cyber safety portfolio provides protection across three key categories in multiple channels and geographies, including security and performance, identity protection, and online privacy. We have built a technology platform that brings together software and service capabilities within these three categories into a comprehensive and easy-to-use integrated platform across our brands. We bring award-winning products and services in cybersecurity, privacy and identity protection to approximately 500 million users in more than 150 countries so they can live their digital lives safely, privately, and confidently today and for generations to come.
We have a 52/53-week fiscal year ending on the Friday closest to March 31. Fiscal 2024, 2023 and 2022 in this report refers to fiscal years ended March 29, 2024, March 31, 2023 and April 1, 2022, respectively, each of which was a 52-week year.(from Gen Digital’s form 10k )
