Rating Change #8
Symantec Corp (SYMC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- SYMANTEC CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SYMANTEC CORP increased its bottom line by earning $1.57 versus $0.76 in the prior year. This year, the market expects an improvement in earnings ($1.69 versus $1.57).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 232.7% when compared to the same quarter one year prior, rising from $168.00 million to $559.00 million.
- The gross profit margin for SYMANTEC CORP is currently very high, coming in at 88.70%. Regardless of SYMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SYMC's net profit margin of 33.30% compares favorably to the industry average.
- SYMC has underperformed the S&P 500 Index, declining 23.71% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Net operating cash flow has declined marginally to $687.00 million or 0.29% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
Symantec Corporation provides security, storage, and systems management solutions internationally. The company's Consumer segment delivers Internet security, PC tune-up, and online backup solutions and services to individual users and home offices. The company has a P/E ratio of 9.8, equal to the average computer software & services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Symantec has a market cap of $11.2 billion and is part of the technology sector and computer software & services industry. Shares are down 4% year to date as of the close of trading on Thursday.You can view the full Symantec Ratings Report or get investment ideas from our investment research center.