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
Mon, Nov. 21, 3:58 PM
- Attributed to Symantec's (SYMC +3.2%) planned funding of its $2.3B buyout of LifeLock with $1.5B of balance sheet cash and $750M of incremental debt.
- S&P Global Ratings expects increased debt and lower levels of cash to bring adjusted leverage to more than 4x at transaction finalization and to remain greater than 3x for 12-24 months subsequent that point.
- A more than two notch downgrade is considered unlikely.
Sun, Nov. 20, 10:56 PM
- Symantec (NASDAQ:SYMC) agrees to acquire LifeLock (NYSE:LOCK) for ~$2.3B including debt, in a deal the companies say will create the world’s largest consumer security business with more than $2.3B in annual revenue based on last fiscal year revenues for both companies.
- The deal values LOCK at $24/share, a 16% premium to its Friday closing price of $20.75.
- SYMC says it hopes to integrate the LifeLock product with its Norton antivirus businesses into a single product line after the acquisition closes.
Thu, Nov. 17, 10:00 AM
Mon, Nov. 14, 5:10 PM
- Symantec (NASDAQ:SYMC) and P-E firms Permira and TPG are among companies interested in bidding for LifeLock (NYSE:LOCK), Bloomberg reports.
- LOCK is working with Goldman Sachs on the potential sale, which could value the company at ~$2B, according to earlier reports.
- SYMC has been re-orientating its business more heavily toward cybersecurity, acquiring Blue Coat from Bain Capital earlier this year in a $4.65B deal.
Wed, Nov. 9, 3:03 PM
- With a Trump agenda calling for "an immediate review of all U.S. cyber defenses and vulnerabilities" among other items to be addressed, the sector has seemingly responded positively on the near-term. Exact methods or execution revolving around the position, however, of course remains awaited.
- Sector price movements – FireEye (FEYE +0.5%), Palo Alto Networks (PANW +3%), Fortinet (FTNT +1%), CyberArk Software (CYBR +3.5%), Check Point Software Technologies (CHKP +1.7%), Proofpoint (PFPT +2.3%), Imperva (IMPV +0.8%), Symantec (SYMC +0.6%), Barracuda Networks (CUDA +2.2%), VASCO Data Security International (VDSI +3.7%), Akamai Technologies (AKAM +0.3%), Limelight Networks (LLNW +2.2%), Level 3 Communications (LVLT +1.9%)
- Related – (NYSEARCA:HACK)
Fri, Nov. 4, 12:48 PM
- Results – revenue $1.015B (+12% Y/Y), EPS $0.30 (vs. $0.29 Y/Y), operating margin 29.2% (vs. 31.2% Y/Y), net income $192M (vs. $196M Y/Y)
- Segment revenues – Consumer Security $405M (-4% Y/Y), Enterprise Security $610M (+26% Y/Y)
- Geographic revenues – International $502M (+19% Y/Y), U.S. $513M (+6% Y/Y), Americas $571M (+6% Y/Y), EMEA $253M (+13% Y/Y), Asia Pacific & Japan $191M (+31% Y/Y)
- Q3 projections – revenue $1.070B-$1.090B (consensus $1.11B), Enterprise Security revenue $675M-$690M, Consumer Security revenue $395M-$400M, operating margin 27%-28%, EPS $0.27-$0.29 (consensus $0.30), tax rate 29%
- FY 2017 projections – revenue $4.040B-$4.120B (consensus $4.08B), operating margin 27%-29%, EPS $1.12-$1.18 (consensus $1.12), tax rate 29%
- Symantec (NASDAQ:SYMC) CEO Greg Clark: "We have made remarkable progress in the short time that Blue Coat and Symantec have been combined. We completed the first phase of delivering our Integrated Cyber Defense Platform, our sales force is now enabled to sell the Company’s combined portfolio, and our cost savings and synergy initiatives are tracking ahead of schedule. There’s more integration work ahead, but I’m confident about our future. Since closing in August, we’ve brought to market two significant new solutions integrating the Data Loss Protection and Cloud Access Security Broker technologies and shipping Symantec Endpoint Protection 14. I’m particularly proud of the value we are providing our existing customers by integrating artificial intelligence with two of the largest threat databases in the world. This integration has improved our existing products which are now blocking an additional 500,000 attacks per day across the endpoint and network."
- Share price summary – 1-month, -7%; 3-month, +11%, 1-year, +12%
- Prior quarters overview
- Earnings call transcript
- Earnings call slides
- Press release
Thu, Nov. 3, 4:08 PM
Wed, Nov. 2, 5:35 PM
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Mon, Oct. 31, 7:07 PM
- Despite challenges to top-line growth at FireEye (NASDAQ:FEYE) [$17 target], firm remains "positive on the operating leverage potential of what continues to be an unprofitable model." Further: "There are still plenty of costs that can be taken out, and we think there’s significant opportunity for operating leverage and for value creation in the shares, even if revenue growth remains sluggish. Looking more near-term, we’re comfortable that FY operating margin guidance of -27% is achievable."
- On Symantec (NASDAQ:SYMC) [$28 target], projects in-line (-35% Y/Y) to moderately above revenue, though likes the name largely on predicted revenue and EPS improvements resulting from progressing Blue Coat integration. However, does warn on prolonged margin improvement similarly attributable to the process.
- Also set to report this week, Imperva (NYSE:IMPV) and Qualys (NASDAQ:QLYS) are both restated at Neutral. For Imperva, rating is due to expectations for in-line results, previously issued reduced guidance (low bar), reported employee turnover and M&A noise. For Qualys, would like to see sustained revenue growth above a low-20% range before becoming more positive.
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