Why NortonLifeLock Stock Failed To Outperform The S&P Despite Steady Revenue Growth

-8.03%
Downside
24.21
Market
22.27
Trefis
NLOK: NortonLifeLock  logo
NLOK
NortonLifeLock

NortonLifeLock Inc. (NASDAQ: NLOK) stock price rose just 20% from $19 in 2018 end, to around $23 currently, primarily due to slight favorable changes in its P/S multiple and revenues. The company witnessed a steady rise in revenue per share over this period, helped by a drop in the outstanding share count. Despite this, the stock has failed to outperform the S&P, which has risen around 55% in comparison over this period.

In our interactive dashboard, Why NortonLifeLock Stock Moved: NLOK Stock Has Gained 20% Since 2018, we break down the factors behind this move.

(A) NortonLifeLock’s Total Revenue has grown 14% from $2.46 billion in FY 2019 to $2.8 billion currently

  • NLOK’s total revenue has risen strongly from $2.46 billion in FY ’19 to $2.8 billion in FY ’22 (NLOK’s fiscal year ends in March), and currently stands at around the same level.
  • As of FY ’22, around 60% of NLOK’s sales come from its consumer security segment, which brought in $1.67 billion in FY ’22
  • Identity and Information protection sales make up the remaining 40%, standing at $1.13 billion in FY ’22.
  • For details about NortonLifeLock revenues and comparison to peers, see NortonLifeLock (NLOK) Revenue Comparison
Relevant Articles
  1. Despite Sales Growth, NortonLifeLock Stock Has Failed To Outperform The S&P- Here’s Why
  2. NortonLifeLock Stock Has Returned Just 35% Since 2018: Here’s Why
  3. After Rising 10% Last Week, Time To Exit NortonLifeLock Stock?
  4. Cybersecurity Demand Surge And Profitability Growth Make NortonLifeLock Stock A Smart Buy
  5. These Tech Stocks Will Benefit As The Fed’s Advances Rate Hike Timeline
  6. NortonLifeLock & eBay: Value Tech Stocks Are Back In Favor

(B) Revenue per share (RPS) increased 24% from $3.96 in FY ’19 to $4.89 currently

  • NLOK revenue rose from $2.46 billion in FY ’19 to $2.8 billion currently, while the outstanding share count decreased from 620 million in FY ’19 to 571.4 million currently.
  • Due to this, RPS has risen from $3.96 in FY ’19 to $4.89 currently.

(C) Price-To-Sales (P/S) multiple for NortonLifeLock rose from 4.5x in 2018-end to almost 6x by 2021 end, but has pulled back to 4.6x currently, still marginally higher than its 2018 level

  • Due to NLOK’s steady performance since 2018-end, its P/S multiple rose strongly from 4.5x in 2018-end to as high as 6x by late 2021.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 4.6x.
  • For additional details about the company’s EBITDA and comparison to peers, see NortonLifeLock (NLOK) EBITDA Comparison.

With inflation rising and the Fed raising interest rates, NortonLifeLock has fallen 29% this year. Can it drop more? See how low can NLOK stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Jun 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 NLOK Return -7% -13% -5%
 S&P 500 Return -6% -18% 74%
 Trefis Multi-Strategy Portfolio -3% -22% 207%

[1] Month-to-date and year-to-date as of 6/28/2022
[2] Cumulative total returns since the end of 2016

 

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates