NEW YORK (TheStreet) -- LifeLock (LOCK) stock is surging 37.46% to $13.32 in after-hours trading on Wednesday after the company announced it reached a tentative agreement with the Federal Trade Commission and representatives of a class action lawsuit related to false advertising claims.
The proposed settlement with the FTC will not require the company to change its products or current marketing practices.
In July, the FTC claimed LifeLock had failed to protect consumer data, produced false advertisements of its services and failed to keep records.
LifeLock has set aside $116 million for the settlement, but did not offer any other details.
"We believe the agreements we announced today are in the best interest of our shareholders and represent a positive step toward achieving closure on substantial outstanding litigation against the company," CEO Todd Davis said in a statement.
Additionally, the identity theft protection provider announced better than expected 2015 third quarter financial results.
LifeLock posted earnings of 28 cents per share on $151.95 million in revenue for the latest quarter, beating estimates of earnings of 25 cents per share on $147.36 million in revenue.
By the end of the trading day, 2.87 million shares of LifeLock had exchanged hands, compared with its average daily volume of 1.71 million shares.
TheStreet Ratings team rates LIFELOCK INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate LIFELOCK INC (LOCK) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.
You can view the full analysis from the report here: LOCK