NEW YORK (TheStreet) -- Symantec (SYMC - Get Report) shares continued to slide after the company's third executive departure in as many months. During Tuesday's session, shares dropped 0.69% and shed an additional 0.69% to $22.89 in premarket trading on Wednesday.
The global security company announced late Monday that its products and services chief, Francis deSouza, was leaving to pursue a presidency at Illumina (ILMN), a genetic technology firm. The products and services division will now report directly to CEO Steve Bennett.
The Mountain View, Calif.-based business experienced a turbulent October after lower-than-expected guidance and a year-on-year sales decline in the second quarter. On Oct. 24, shares plunged 12% after projected third-quarter earnings between 41 cents to 43 cents a share failed to impress. Analysts surveyed by Thomson Reuters had anticipated 51 cents a share.
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Sales in Symantec's three core divisions -- consumer security software, enterprise security software and storage software -- saw low single-digit declines in the second quarter.
"We are confident in our strategy and have made significant progress in our company transformation. We've improved our existing point solution offerings, built dedicated teams to create and refine the new integrated offerings, and have attracted lighthouse customers as early adopters of our new offerings," reassured Bennett in a statement Tuesday.
Following the announcement of deSouza's departure, Macquarie downgraded Symantec to "neutral" and lowered its price target to $24 from $26.
TheStreet Ratings team rates Symantec Corp as a Buy with a ratings score of B+. The team has this to say about its recommendation:
"We rate Symantec Corp (SYMC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income increased by 27.5% when compared to the same quarter one year prior, rising from $189 million to $241 million.
- The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 25.37%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Regarding the stock's future course, although almost any stock can fall in a broad market decline, SYMC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has slightly increased to $191 million or 7.3% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.99%.
- Symantec Corp has improved earnings per share by 25.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, Symantec Corp reported lower earnings of $1.05 a share vs. $1.57 a share in the prior year. This year, the market expects an improvement in earnings ($1.77 vs. $1.05).
- You can view the full analysis from the report here: SYMC Ratings Report