Symantec Is A Value Trap
Paulo Santos • 19 Comments
Paulo Santos • 19 Comments
Symantec's Renaissance Is On The Way
Hunter Wolf • 26 Comments
Hunter Wolf • 26 Comments
Fri, Oct. 21, 1:50 PM
- See: Internet attack takes many sites offline for hours
- Up today – FireEye (FEYE +1.9%), Palo Alto Networks (PANW +0.6%), Fortinet (FTNT +1.5%), Cyberark Software (CYBR +3.9%), Check Point Software Technologies (CHKP +0.8%), Proofpoint (PFPT +10.5%) [see earnings]
- Despite these gains, on the last-month term FireEye's lower by 9%, Palo Alto Networks' unmoved, Fortinet's down 11%, Cyberark Software's down 6%, Check Point Software Technologies' up 2% and Proofpoint's up 1.7%. Names down today in the space include Imperva (IMPV -2.6%), Symantec (SYMC -0.3%) and Barracuda Networks (CUDA), respectively lower by 12%, 4% and 1% on the month.
- CDN providers – Akamai Technologies (AKAM +1.5%), Limelight Networks (LLNW -0.5%), Level 3 Communications (LVLT -0.6%)
- Related – (NYSEARCA:HACK)
Tue, Oct. 18, 9:20 AM
- In Germany, against Blue Coat Systems' subsidiary (NASDAQ:SYMC), Blue Coat Systems GmbH.
- Finjan Holdings president and CEO Phil Hartstein: "The impetus for our third suit against Blue Coat and its subsidiary, Blue Coat GmbH, is that we believe that they continue to infringe other patents in our portfolio, including Finjan's European patent, even after we obtained a $39.5M jury verdict and judgment against Blue Coat for infringement last August. As for all who are granted valuable patent rights, we have essentially two options when dealing with an unwilling licensee -- seek the courts' assistance to enforce our patents on the merits, or abandon those patent rights. For Finjan, the latter is simply not an option."
- Further suits filed by Finjan Holdings (NASDAQ:FNJN) against FireEye, Symantec, Palo Alto Networks and ESET and affiliates are also pending.
Thu, Sep. 15, 3:08 PM
- Symantec (SYMC +0.3%) is presently trading up nearly 30% on the last three months, around 50% since early March and around 24% on the year.
- Guggenheim Securities analyst Ryan Hutchinson today restates a Buy rating and $30 price target (current price $24.68). He notes Symantec's ability to generate over $1B in revenue annually, its robust consumer and enterprise market presence, brand recognition, large install base, threat telemetry capabilities, enthusiastic product roadmap and best-in-class network security business position as catalysts for the company to "reclaim its crown."
Fri, Aug. 19, 10:38 AM
Mon, Aug. 15, 10:37 AM
- Goldman Sachs analyst Gabriela Borges and Morgan Stanley analyst Keith Weiss see similar upside in Symantec (SYMC +0.8%), setting Buy and Overweight ratings, respectively. Borges has a $26 price target and Weiss $27 (current price $22.68).
- Borges cites new margins and free cash flow profile, cost savings, share price stabilization and 2017 proxy refresh cycle tailwinds. She additionally comments on Symantec's acquisition of Blue Coat: "While we prefer to be conservative on technology synergies, both Symantec and Blue Coat have sticky installed bases and deep customer engagements that can drive stability, despite intensifying endpoint/network competition."
- Weiss cites "increased consolidation of security functionality onto broader platforms, increased visibility across threat vectors and more automation across the security architecture," enterprise security growth drivers and cost synergies. On the Blue Coat deal: "While mergers hold risk, if the new mgmt team well executes to this potential, a stronger growth profile should push multiples higher."
- Symantec is up nearly 25% since the acquisition was announced in June.
Fri, Aug. 5, 9:12 AM
Thu, Aug. 4, 4:09 PM
Wed, Aug. 3, 5:35 PM
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Tue, Jul. 5, 2:47 PM
- With rumblings growing this week of flaws in security software from Symantec (SYMC -0.7%), a federal agency is warning over an antivirus vulnerability.
- The Computer Emergency Readiness Team at the Dept. of Homeland Security calls it a "very serious event" in an alert to the security industry. It's advising customers apply two patches that Symantec issued.
- The vulnerability can allow attackers to remotely control computers afflicted by the flaw.
- Last week, Google "Project Zero" team member Tavis Ormandy posted about flaws "as bad as it gets" in Symantec and Norton-branded antivirus products. The problems can occur without a click or other user interaction, he said. Symantec issued an advisory in response and said updates were available to fix the vulnerabilities.
Wed, Jun. 29, 8:10 AM
Mon, Jun. 20, 11:48 AM
- UBS's Brent Thill says the pillars of his previously bearish view - a lack of revenue drivers, and lame management - go away thanks to the $4.7B purchase of Blue Coat, whose "respected" CEO Greg Clark will become CEO of Symantec (SYMC +4.5%), and join the board.
- He does caution, though, of the high technical and sales integration/execution/cultural risks. Clark and team, however, have "a turnaround track record," he says.
- Thill upgrades SYMC to Buy from Sell, and lifts the price target to $24 from $16 (current price is $20.86).
Thu, Jun. 16, 2:40 PM
- Believing the company's $4.65B deal to buy security hardware/software firm Blue Coat will almost immediately return the company's enterprise security ops to positive growth, BTIG's Joel Fishbein has upgraded Symantec (SYMC +2.7%) to Buy, and set a $23 target.
- Fishbein also likes the planned appointment of Blue Coat chief Greg Clark as Symantec's CEO, and thinks initial targets for $150M/year in cost synergies and FY18 (ends March '18) EPS of $1.75 appear conservative.
- Symantec is up 13% since the Blue Coat deal was announced.
- Yesterday: Symantec reportedly made a bid for FireEye before striking the Blue Coat deal
Wed, Jun. 15, 2:58 PM
- Bloomberg reports FireEye (FEYE +5.4%) has rejected several takeover offers.
- The report follows speculation a tech giant such as Cisco or IBM will bid for threat-prevention hardware/software/services provider as shares continue trading at depressed levels. FireEye rose on Monday after Symantec announced it's buying Blue Coat for $4.65B.
- Update: Bloomberg reports FireEye hired Morgan Stanley to field offers, and "turned down at least two suitors that made offers below its expectations of $30 or more per share." Symantec (NASDAQ:SYMC) was one of the suitors before deciding to acquire Blue Coat. The sale process is no longer active.
Sun, Jun. 12, 9:22 PM
- Symantec (NASDAQ:SYMC) is acquiring security hardware, software, and service provider Blue Coat (BLCT - was set to go public) for $4.65B in cash. With Blue Coat having posted revenue of $755M in the 12 months ending April, Symantec is paying 6.2x trailing sales.
- Blue Coat CEO Greg Clark will become Symantec's CEO once the deal closes; Symantec announced in April Michael A. Brown will be stepping down as CEO once a successor is found. Symantec chairman/PayPal CEO Dan Schulman will be the company's chairman.
- As part of the deal, P-E firm Silver Lake is doubling its Symantec investment to $1B via 2% convertible notes due 2021, and Blue Coat majority owner Bain is reinvesting $750M in the post-merger company via convertible notes on the same terms. Bain managing director David Humphrey will join Symantec's board. The notes carry a $20.41/share conversion price.
- Symantec: "Blue Coat is the #1 market share leader and share gainer in Web Security with a widely recognized portfolio of integrated technologies serving as a trusted platform to deliver Cloud Generation Security to more than 15,000 customers worldwide ... This transaction will combine Symantec’s leading threat telemetry with Blue Coat’s networks and cloud security offerings to provide differentiated security solutions across hundreds of millions of endpoints and servers, and billions of email and web transactions."
- The deal is expected to close in Q3, and be financed via cash on hand and $2.8B in debt. With Bain having acquired Blue Coat for $2.4B last year, the firm appears to be reaping a 90%+ return. Thanks partly to $150M/year in expected cost synergies, Symantec now expects FY18 (ends March '18) EPS of $1.70-$1.80 (compares with a current FY18 EPS consensus of $1.39). The company still plans to return the $1.3B left to be spent on its $5.5B capital return program by the end of FY17.
- Conference call at 8AM ET on Monday (webcast).
Fri, May 13, 11:45 AM
- Symantec (NASDAQ:SYMC) is up 1.7% today following an earnings miss that nonetheless fell in line with last month's earnings warning, and provided some details on a $400M efficiency program.
- A plan to cut 1,200 jobs and close a quarter of its office has confused William Blair's Jonathan Ho, even while he calls it an "ambitious" move.
- “We are perplexed at how the company plans to reposition itself as a next-generation security player and reaccelerate growth, while simultaneously reducing spending and headcount,” Ho wrote. He's maintaining a Market Perform rating on the stock.
- But a legacy player like Symantec faces challenges amid a broad migration to next-generation subscription products: “We remain concerned that the long-term transition away from legacy antivirus to next-generation solutions may be happening at an accelerating pace, which could be a headwind to Symantec’s legacy business."
- Now read Symantec Is A Value Trap »
Thu, May 12, 5:03 PM
- Symantec (NASDAQ:SYMC) came in largely flat in fiscal Q4 results, in line with its profit warning, and it cut its dividend as expected as it pursues an efficiency program for fiscal 2017.
- Revenues fell 3% on a GAAP basis (down 2% in constant currency, and down 6% on non-GAAP basis).
- The company says there's a $400M efficiency program under way, including eliminating stranded costs from its divestiture of Veritas, and that it's entered into a new $2B credit facility (includes a $1B refinancing of its revolver and a $1B prepayable term loan).
- With that, the company is slashing its quarterly dividend to $0.075 from the previous $0.15. The dividend will be paid June 22 to shareholders of record as of the June 8 close (ex-div on June 6).
- For Q1 2017, it's guiding to GAAP revenue of $865M-$895M, operating margin of 10-12.5%, and non-GAAP EPS of $0.24-$0.26 (above a consensus for $0.24). For the full year, it's guiding to GAAP revenue of $3.49B-$3.58B, operating margin of 12-13.5%, and non-GAAP EPS of $1.06-$1.10 (vs. consensus for $1.09).
- Conference call at 5 p.m. ET.
- Press Release