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Symantec: Steady as She Goes

Symantec's turnaround is off to a good start, but investors should not get carried away.

CUPERTINO, Calif. (

TheStreet

-- Like the San Francisco Giants, who are off to a flyer in the World Series, software maker

Symantec's

(SYMC) - Get Report

turnaround is off to a strong start. Investors, though, should not get carried away.

The security specialist, which has previously

struggled with poor execution

, beat Wall Street's

second-quarter estimates

on Wednesday, despite a profit dip.

Symantec's shares continued their post-earnings surge on Thursday, rising 6.33% to $16.80 in pre-market trading as investors reacted positively to the results. Coming off a disappointing first quarter, Symantec noted strength in both its enterprise and government businesses, and gave healthy guidance for its fiscal third quarter.

Investors, however, should keep the champagne on ice. Alluding to the Giants' tussle with the Texas Rangers, Pat Walravens, an analyst at JMP Securities, says that Symantec has had a great first game, but warns that a lot more work is needed to win the Series.

"With respect to execution, we believe investors will breathe a sigh of relief, but that it may take a few more quarters of strong execution before Symantec is out of the valuation penalty box," explained Walravens, in a note released on Thursday. "It was clearly a better quarter than the June quarter but our sense is that Symantec still has wood to chop in the second half of the year and that there is a lot more work to be done."

Symantec's storage management business, for example, continues to be an area of key weakness, declining 8% year over year, although the software maker told

TheStreet

that this is being offset by strength in backup, archiving and data loss prevention.

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Walravens also noted that Symantec's services business was down 19% year over year, or 9% at constant currency, thanks to the company's increasing reliance on partners for consulting services.

Another pressure for Symantec is stiff competition from

Microsoft

(MSFT) - Get Report

and rival security firm

McAfee

(MFE)

, which reports its third-quarter results after market close on Thursday.

Despite these headwinds, Wall Street is generally positive on Symantec's prospects.

JMP's Walravens rates Symantec outperform as does Brad Zelnick, an analyst at Macquarie. Zelnick also raised his Symantec price target from $16 to $19 in a note released on Thursday, citing strength in backup, virtualization and de-duplication technology, which aims to ensure that the same data is not stored twice.

Rival McAfee,

soon to become part of Intel (INTC) - Get Report

, is expected to report revenue of $514.19 million and earnings of 64 cents a share, according to analysts surveyed by Thomson Reuters.

--Written by James Rogers in New York.

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