Why Gen Digital Stock Plummeted Today
Gen Digital (NASDAQ: GEN) stock lost substantial ground in Friday's trading. The company's share price closed out the daily session down 11.2%, according to data from S&P Global Market Intelligence.
Gen Digital published results yesterday for the third quarter of its current fiscal year, a period that concluded on Dec. 29, 2023. Performance for the quarter came in below the market's expectations, and the company issued guidance that fell short of Wall Street's targets.
Gen Digital's recent quarterly results missed the mark
Gen Digital posted non-GAAP (adjusted) earnings per share of $0.49 on revenue of $951 million in fiscal Q3. Meanwhile, the average analyst estimate had called for the business to post per-share earnings of $0.50 on sales of roughly $956.6 million.
With sales up roughly 1.6% year over year last quarter, the company marked its 18th consecutive quarter of annual sales growth. On the other hand, the business's revenue increase in the period came in below the market's expectations. Gen Digital, known for services provided under the Norton and Avast banners, appears to be seeing relatively soft demand increases despite strong tailwinds lifting other parts of the cybersecurity industry.
What comes next for Gen Digital?
For the fourth quarter, Gen Digital is guiding for sales to come in between $960 million and $970 million. Notably, the high end of management's target is still significantly below the midpoint average analyst estimate's call for sales of $974.3 million. Meanwhile, guidance for adjusted earnings between $0.52 per share and $0.54 per share came in roughly in line with Wall Street's target for per-share earnings of $0.53.
GEN PE Ratio (Forward) data by YCharts. PE Ratio = price-to-earnings ratio.
Gen Digital stock doesn't look richly valued, trading at under 11 times this year's expected earnings. Still, the company's long-term growth outlook also looks less exciting on the heels of the recent quarterly report and guidance.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
