Is NortonLifeLock’s Stock Overvalued?

November was a busy month for the erstwhile Symantec Corp., with the company completing the sale of its enterprise business to Broadcom for $10.7 billion, and its consumer business changing its name to NortonLifeLock (NYSE:NLOK) which will now trade under the ticker NLOK. The rechristened company also saw its interim CEO, Richard Hill, stepping down and the CFO, Vincent Pilette, being promoted to the CEO role. The company’s chief accounting officer, Matthew Brown, was made the interim CFO.

Trefis estimates NortonLifeLock’s Valuation to be around $22 per share, which is 10% below the current market price.

• NortonLifeLock makes money by providing cyber security software to end users. Its prominent competitors include Avast and McAfee. Most networking companies now provide cyber security software, which may be served though different channels.
• NortonLifeLock has a single reportable segment, Consumer Security. The company’s revenue grew 39.6% over 2017 to 2019 to $2.3 billion and is expected to increase 20% to nearly $2.8 billion by 2021. Revenue growth of $0.5 billion over the next two years is likely to be driven by conversion of indirect subscribers to direct subscribers outside the U.S. and new products launches.
• Per Trefis, NortonLifeLock is expected to report an EPS of $0.42 for FY2020. This EPS figure coupled with a P/E multiple of 30x, works out to a price estimate of $22 for NortonLifeLock’s stock, which is 10% below the current market price.

Our interactive dashboard about details our forecast for NortonLifeLock’s Net Income and EPS.