Why Symantec (SYMC) Stock Is Declining Today

NEW YORK (TheStreet) -- Symantec (SYMC) shares are down -0.5% to $23.06 on Monday after China's Public Security Ministry ordered government agencies to stop buying the antivirus software due to security vulnerabilities it said it witnessed.

China has become more cautious about using foreign technology in the wake of espionage revelations from NSA contractor Edward Snowden, and this move may be tied to those concerns.

"Symantec does not put hidden functionality or back doors into any of its technologies -- not for the NSA or any other government entities," the company said.

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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 several positive factors, 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 growth in earnings per share, increase in net income, attractive valuation levels, expanding profit margins and notable return on equity. 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:

  • SYMANTEC CORP has improved earnings per share by 14.8% 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 year. We feel that this trend should continue. During the past fiscal year, SYMANTEC CORP increased its bottom line by earning $1.27 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.27).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Software industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $190.00 million to $217.00 million.
  • The gross profit margin for SYMANTEC CORP is currently very high, coming in at 88.18%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.15% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Software industry and the overall market on the basis of return on equity, SYMANTEC CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: SYMC Ratings Report
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