Symantec (NASDAQ:SYMC) announced its Q2 FY12 earnings, reporting revenue growth of 14% year-over-year. Its overall revenue growth was driven by a 27% increase in revenues from security software for businesses despite competition from Intel (NASDAQ:INTC) via McAfee and Microsoft (NASDAQ:MSFT), and a 11% growth in revenues from the consumer antivirus (Norton) business. The results this quarter were pretty much in line with our expectations.

Following the results, we have revised our Trefis price estimate for Symantec to $21.70, which stands nearly 20% above the current market price.

Going forward, we expect the Security Software for Businesses division to contribute to a large portion of the overall revenue growth, backed by the Norton Consumer Antivirus business and the Storage and Server Management division. Together, these three divisions account for nearly 85% of Symantec’s $22 Trefis price estimate.

Check out our complete analysis of Symantec.

Security Software for Businesses Shows Strong Growth

Symantec has traditionally been one of the strongest players in enterprise security software. We estimate its market share in global security software for businesses to be around 30% in 2011. We expect it to continue to increase its market share marginally throughout the forecast period.

Symantec has launched multiple new products in enterprise security which should help it maintain its lead in this market. It recently announced a new cloud security platform, and well as data loss prevention software for tablets. It also launched new cloud based security and backup solutions. In the earnings call, Symantec stated that its new Symantec Endpoint Protection and Data Loss Prevention solutions have seen huge adoption and double digit growth this quarter.^[1]

Symantec’s EBITDA margins in enterprise security have been lower than the consumer security and storage software businesses, but we expect them to improve steadily, approaching 20% by the end of the forecast period.

Storage & Availability Management Software

Storage software is the most valuable business for Symantec, accounting for almost 40% of its Trefis price estimate. Symantec posted a 9% year-over-year growth in revenues in this business this quarter.

We estimate that it has around 18% market share in the storage software business, which will increase marginally to 18.6% by the end of the forecast period.

Symantec’s NetBackup and BackupExec offerings have been seeing increased adoption. Symantec also launched a cloud based backup solution – Backup Exec.cloud, which should help it increase its market share in storage and availability management.

Understand How a Company’s Products Impact its Stock Price at Trefis.

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