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what it is
Gen Digital sells subscription software that protects your devices, passwords, and identity from malware, scams, and cleanup clutter.
how it gets paid
Last year Gen Digital made $3.9B in revenue. Norton consumer security was the main engine at $1.5B, or 38% of sales.
why it's growing
Revenue grew 3.6% last year. Revenue was $1.24B, and the quarter beat consensus by 1.59%.
what just happened
Gen beat by a hair: $0.64 EPS vs $0.63 expected.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
75/100 earnings predictability — reasonably predictable
10.8x trailing p/e — the market's not buying it — or you found a deal
1.8% dividend yield — cash in your pocket every quarter
24.5% return on capital — every dollar works hard here
xvary composite: 60/100 — average
What they do
Gen Digital sells subscription software that protects your devices, passwords, and identity from malware, scams, and cleanup clutter.
40.9% operating margin → profit on sales → this business keeps a lot of each dollar. 24.5% return on capital → cash efficiency → management gets a strong payoff from money it puts in. You are not buying one app. You are buying 5 brands: Norton, Avast, Avira, AVG, and CCleaner.
How they make money
$3.9B
annual revenue · their business grew +3.6% last year
Norton consumer security
$1.5B
+3.2%
Avast consumer security
$1.0B
+1.8%
LifeLock identity protection
$0.7B
+7.0%
CCleaner performance tools
$0.4B
2.5%
Avira and AVG subscriptions
$0.3B
+1.0%
The products that matter
consumer security subscriptions
Norton and Avast cybersecurity suites
$3.9B revenue · +4.2% growth
this is the whole story: a $3.9B subscription engine that grew 4.2% from the prior year while throwing off a 32.5% net margin. The numbers are attractive. The category is mature. That's the tension.
core
Key numbers
$5.0B
FY26 revenue
That is the size of the pie management thinks it can serve next year.
40.9%
operating margin
That means 40.9 cents of every sales dollar stays after operating costs.
$8.4B
long-term debt
That is borrowed money, and it makes growth more expensive if rates stay high.
1.8%
dividend yield
You get paid 1.8% a year to wait, which is modest but real.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 70 / 100
- long-term debt $8.4B (33% of capital)
- net profit margin 34.0% — keeps 34 cents of every dollar in revenue
- return on equity 53% — $0.53 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in GEN 3 years ago → it's now worth $13,830.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Gen beat by a hair: $0.64 EPS vs $0.63 expected.
Revenue was $1.24B, and the quarter beat consensus by 1.59%. Gross margin held at 78.5%, so the business kept most of what it billed.
$1.24B
revenue
$0.64
eps
78.5%
gross margin
EPS beat
The $0.64 EPS mattered because it beat $0.63, and that matters on a 10.8x stock.
-
this should result in adjusted earnings of $0.63 per share on revenues of $1.2 billion, increases of roughly 13% and 24%, respectively, vs. prior year.gen digital’s performance demonstrates the strength of its business, underpinned by a high-margin subscription model that is now expanding into faster-growing adjacencies.
-
the company’s integrated platform gives it broad relevance as digital threats continue to rise.with more households relying on multiple internet devices, as well as the growing amount of sensitive data in the cloud, gen sees an opportunity to grow its average revenue per user (arpu) through bundled offerings and cross-selling across its large installed base. this effort also aligns with gen’s strategic direction to penetrate new customer cohorts by combining technology leadership with improved user experiences. additionally, the company’s recent mergers have yielded efficiencies of scale and a diversified geographic mix, giving gen a strong foundation to upsell new aidriven threat detection and subscriptionbased services. overall, as more and more aspects of daily life become digital, the company stands to benefit from the structural, long-term consumer protection demand that this creates.
-
moving forward, gen digital’s growth strategy is twofold.
-
the primary lever is centered on deeper integration of ai into its security stack.management believes this will enable more proactive and automated threat detection across devices and identity surfaces. the second is expanding into emerging markets where digital adoption is accelerating, but consumer cybersecurity awareness remains low.
-
new product innovations and mobile-first security offerings should help the expansion efforts.
source: company earnings report, 2026
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What could go wrong
gen sells trust for a living. the biggest risk is an execution miss in third-party oversight or AI-driven upsells that makes a 32.5% margin business look a lot less durable.
med
third-party and supply chain oversight
The board specifically flagged the need to strengthen oversight of third-party and supply chain risks. For a cybersecurity company, a weak link outside the company is still your problem once customers blame the brand on the box.
This is a reputation risk first. Any trust hit would pressure renewal rates and make that 32.5% net margin harder to defend.
med
AI features might improve the product more than the numbers
Management is leaning on AI-driven protection and cited a 60% increase in scam blocks from the prior year. That's good evidence the tools are doing something. It is not proof that customers will pay materially more for them.
If AI lifts product quality but not pricing or retention, GEN stays a low-growth software name with a low-growth multiple.
med
$8.4B in long-term debt limits the margin for error
The balance sheet grade is B++, not A+, and long-term debt equals 33% of capital. That is manageable with current profitability. It is less comfortable if growth disappoints or if competitive spending has to rise.
Leverage does not look dangerous today. It does mean operational mistakes matter more than they would in a debt-light business.
$3.9B in revenue and a 32.5% net margin give GEN room to absorb normal bumps, but $8.4B in debt means you should care a lot about whether growth actually reaccelerates.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
watch whether revenue growth stops being a rounding error
The business grew 3.2% last year. If that number stays stuck in the low single digits, the cheap multiple is probably deserved.
trend
track whether AI actually lifts average revenue per user
A 60% increase in scam blocks sounds good. The real tell is whether customers upgrade, bundle more services, or pay more to stay.
calendar
next earnings need to validate the $1.2B and $0.63 guide
Management put the number out there. Now the market wants proof that the acceleration is real, not just a good quarter on paper.
risk
keep an eye on vendor and supply chain controls
When the board calls out third-party oversight, you should listen. Cybersecurity companies do not get many free mistakes.
Analyst rankings
short-term outlook
average
momentum score 3. In human-speak, analysts do not see a strong short-term edge either way.
risk profile
average
stability score 3 — middle-of-the-pack risk. Not a bunker stock, not a chaos stock.
chart momentum
average
technical score 3 — the chart is not screaming anything at you right now.
earnings predictability
75 / 100
management has been reasonably consistent. You usually get steadiness here, not drama.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 365 buyers vs. 238 sellers in 3q2025. total institutional holdings: 0.5B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$23
$40
$28
current price
$32
target midpoint · +16% from current · 3-5yr high: $55 (+100% · 20% ann'l return)
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