NEW YORK (TheStreet) -- Last month Symantec Corp. (SYMC) fired Steve Bennett, its CEO. Now, the security, backup and availability solutions company is "attracting activist investors and private equity firms...in a development that could potentially lead to its breakup or sale," sources tell Reuters.
According to the report, "activist investors, including ValueAct Capital, are examining the company's prospects and may decide to build up stakes to agitate for change."
Further, "a number of private equity firms, including Bain Capital, Blackstone Group LP (BX) and Caryle Group LP (CG), have started assessing the possibility of a leveraged buyout of all or parts of Symantec," sources said.
Symantec is worth about $14 billion at its current stock price. Shares of Symntec are up 0.78% to $20.76.
TheStreet Ratings team rates SYMANTEC CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their 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 increase in net income, reasonable valuation levels, growth in earnings per share, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the Software industry average, but is less than that of the S&P 500. The net income increased by 31.0% when compared to the same quarter one year prior, rising from $216.00 million to $283.00 million.
- SYMANTEC CORP has improved earnings per share by 33.3% 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 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.86 versus $1.05).
- The gross profit margin for SYMANTEC CORP is currently very high, coming in at 88.15%. 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, the net profit margin of 16.59% trails the industry average.
- SYMC, with its decline in revenue, underperformed when compared the industry average of 11.5%. Since the same quarter one year prior, revenues slightly dropped by 4.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: SYMC Ratings Report