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Is antivirus software really dead? The answer will surprise you

By Chris Lau for Kapitall

It is hard to believe Symantec ( SYMC ) would declare antivirus software "dead," especially when this type of solution accounts for over 40 percent of revenue. It could be argued that viruses attacking desktop software are on the decline relative to those that highjack browsers. If that is the case, Symantec could have a real problem on its hands. Despite the comment, Symantec argues that damage control does not stop at antivirus detection: users need to consider backup software and other optimization tools.

Tablet usage rises

Malware detection is a growing source of revenue for other antivirus software companies, notably AVG Technologies ( AVG ). AVG hopes Android users will add malware protection for smartphones and tablets. In its first quarter, AVG grew revenue by 19%. The software firm has 187 million users, but mobile users grew to 81 million. It released a new application called AVG Zen, which the firm promises will provide "discovery and deployment of products and services across connected devices."

Symantec's own problems

Symantec could be ignoring problems in its own solutions. Over the last few years, Symantec solutions got bigger and more resource intensive. Users get more protection from foreign risks introduced to computer systems, but the scanning and checking slows down the system.

Software does not protect from Exploits

Antiviral software is ineffective against exploits. Symantec and AVG software were ineffective against the Heartbleed bug vulnerability. By contrast, VASCO Data Security ( VDSI ) raised awareness of the Heartbleed bug. Interest over VASCO might explain why shares shot up in recent weeks

Symantec in transition

Symantec does not appear to be a value trap. It expected revenue and earnings to meet or exceed consensus for the fiscal year. Symantec forecasts revenue will be as high as $6.77 billion, while earnings will be between $1.84 - $1.92 per share. This values the company at a forward P/E of around 10.80. Uncertainty at the executive level (the company fired its CEO) could limit upside in the short term, but intrusion prevention and antivirus detection tools are here to stay.

Click on the interactive chart to view data over time.

1. Symantec Corporation ( SYMC , Earnings , Analysts , Financials ): Provides security, storage, and systems management solutions to secure and manage information. Market cap at $14.5B, most recent closing price at $20.84.

2. VASCO Data Security International Inc. ( VDSI , Earnings , Analysts , Financials ): The company has developed patented digital security hardware, software, and digital-signature technology. Market cap at $311.48M, most recent closing price at $7.99.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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