NortonLifeLock Inc. (NasdaqGS:NLOK) is scheduled to report Q2 earnings results after markets close for trading on November 5, 2020.
The company is expected to report earnings of $0.33/share on revenue of $621.4 million. The consensus earnings per share (EPS) of $0.33/share is based on a poll of 15 analysts and represents a decline in eps of −28.1% over the same quarter last year, when the company reported earnings of $0.46/share.
The revenue forecast of $621.4 million based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −47.6%. Last year the company reported $1.187 billion in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $621.45 | $1,187.00 | −47.6% |
| EPS | $0.33 | $0.46 | −28.1% |
Earnings Call Trends
Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 1 quarter.
What are your expectations from NortonLifeLock Inc. for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q1, 2021 | $0.22 | $0.31 | 42.6% | Beat |
| Q4, 2020 | $0.16 | $0.26 | 58.2% | Beat |
| Q3, 2020 | $0.08 | $0.25 | 217.6% | Beat |
| Q2, 2020 | $0.42 | $0.46 | 8.9% | Beat |
| Q1, 2020 | $0.33 | $0.43 | 32.2% | Beat |
| Q4, 2019 | $0.39 | $0.39 | 0% | Met |
| Q3, 2019 | $0.39 | $0.44 | 12.7% | Beat |
| Q2, 2019 | $0.33 | $0.42 | 28.1% | Beat |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending July 3, 2020, the stock price reacted by increasing 6.7%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| August 6, 2020 | $21.90 | $23.36 | 6.7% | Increase |
| May 14, 2020 | $20.43 | $20.02 | −2.0% | Decline |
| February 6, 2020 | $17.64 | $19.73 | 11.8% | Increase |
| November 7, 2019 | $24 | $24.83 | 3.5% | Increase |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.34, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.34 implies a 1.0% chance of earnings manipulation.
Fundamentals And Technical Analysis
NortonLifeLock Inc. is currently trading at $20.55/share, down −1.2% for the day. The company is trading at approximately 71.8% of its 52-week high of $28.70/share. The company’s stock price is down −12.1% since the last earnings report and down −1.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 46.15 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 17.66 and a forward P/E multiple of 15.26.
NortonLifeLock Inc.’s current share price also implies a price-to-book (P/B) multiple of −24.19. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2021.Q1 |
| Period End Date | July 3, 2020 |
| Stock Price (Current) | $20.55 |
| P/E Ratio | 17.7x |
| P/E Ratio (Fwd) | 15.3x |
| PEG Ratio | 0.0 |
| Total Debt / Total Capital | 23.1% |
| Levered Free Cash Flow | -$1.057 billion |
| EV / EBITDA | 16.2x |
NortonLifeLock Inc. is a large-cap stock with a market capitalization of $12.293 billion and a total enterprise value of $14.853 billion. The company operates in the Information Technology sector and the Software industry.
NortonLifeLock Inc. provides cyber safety solutions for consumers worldwide. The company offers Norton security solutions as a subscription service providing protection for PCs, Macs, and mobile devices against malware, viruses, adware, ransomware, and other online threats on various platforms; and LifeLock identity theft protection solution that offers monitoring, alerts, and restoration services to its customers. It also provides Norton Secure VPN and SurfEasy VPN for online privacy, as well as Norton family, a solution for home and family, which offers protection and security, parental control, and GPS location monitoring services. NortonLifeLock Inc. markets and sells its products and related services through retailers, telecom service providers, hardware original equipment manufacturers, and employee benefit providers, as well as e-commerce platform. The company was formerly known as Symantec Corporation and changed its name to NortonLifeLock Inc. in November 2019. NortonLifeLock Inc. was founded in 1982 and is headquartered in Tempe, Arizona.
