Gen Digital (NASDAQ:GEN) Shares Gap Up on Strong Earnings

Key Points

• Gen Digital shares surged after the company reported quarterly EPS of $0.74, beating the $0.72 consensus, while revenue rose 12.2% year over year to $1.37 billion and exceeded estimates.
• Management raised its fiscal 2027 revenue outlook amid strong cybersecurity demand, with partner-channel revenue increasing 40% to $295 million.
• Gen Digital declared a quarterly dividend of $0.125 per share, or $0.50 annualized, while analysts maintained an overall “Hold” rating with an average price target of $30.25.

Shares of Gen Digital Inc. (NASDAQ:GEN - Get Free Report) gapped up prior to trading on Thursday following a stronger than expected earnings report. The stock had previously closed at $24.35, but opened at $26.90. Gen Digital shares last traded at $27.7720, with a volume of 1,500,479 shares changing hands.

The company reported $0.74 earnings per share for the quarter, beating analysts' consensus estimates of $0.72 by $0.02. Gen Digital had a net margin of 20.73% and a return on equity of 55.93%. The company had revenue of $1.37 billion for the quarter, compared to the consensus estimate of $1.34 billion. During the same quarter in the prior year, the firm earned $0.62 earnings per share. The firm's revenue for the quarter was up 12.2% compared to the same quarter last year.

Gen Digital Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, December 9th. Investors of record on Monday, November 16th will be given a dividend of $0.1250 per share. This represents a $0.50 dividend on an annualized basis and a yield of 1.8%. The ex-dividend date is Monday, November 16th. Gen Digital's dividend payout ratio is 29.07%.

Key Gen Digital News

Here are the key news stories impacting Gen Digital this week:

• Positive Sentiment: Earnings and revenue beat expectations: Gen Digital reported adjusted earnings of $0.74 per share, above the $0.72 consensus estimate, while revenue rose 12.2% year over year to $1.37 billion, exceeding forecasts of $1.34 billion. EPS increased from $0.62 in the prior-year quarter. Gen Digital Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: Management raised its outlook: Gen increased its fiscal 2027 revenue forecast, citing strong cybersecurity demand. The upgraded guidance strengthens the growth outlook and was a key catalyst for the stock. Gen Digital raises annual revenue forecast on strong cybersecurity demand
• Positive Sentiment: Partner-channel momentum was strong: Partner revenue grew 40% year over year to $295 million, supporting Gen’s ability to expand distribution and sustain double-digit growth. Gen Digital: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Dividend continued: Gen declared a quarterly cash dividend of $0.125 per share, payable December 9 to shareholders of record November 16. The annualized payout is $0.50 per share, representing an approximately 2.1% yield. Gen Digital approves regular quarterly cash dividend
• Neutral Sentiment: Weakness in other cybersecurity shares, including Fortinet and Tenable, highlighted broader sector volatility, although Gen Digital outperformed those names following its results. Fortinet plunges after-hours as Gen Digital rises
• Negative Sentiment: Technical pressure remains a risk: Gen Digital recently crossed below its 200-day moving average, which could encourage caution among momentum-focused investors despite the favorable earnings results. Gen Digital stock crosses below 200-day moving average

Analysts Set New Price Targets

GEN has been the subject of several research reports. Barclays upped their price target on shares of Gen Digital from $27.00 to $32.00 and gave the company an "equal weight" rating in a research report on Friday, August 7th. Royal Bank Of Canada dropped their price objective on shares of Gen Digital from $26.00 to $24.00 and set a "sector perform" rating on the stock in a report on Monday, October 12th. Weiss Ratings upgraded shares of Gen Digital from a "hold (c)" rating to a "hold (c+)" rating in a research report on Friday, October 16th. Wells Fargo & Company upped their target price on shares of Gen Digital from $22.00 to $28.00 and gave the company an "equal weight" rating in a report on Friday, August 7th. Finally, Wall Street Zen downgraded shares of Gen Digital from a "buy" rating to a "hold" rating in a research report on Sunday, August 16th. One investment analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat, the company has an average rating of "Hold" and an average target price of $30.25.

Insider Transactions at Gen Digital

In other news, insider Travis Witteveen sold 30,000 shares of the stock in a transaction on Monday, August 10th. The shares were sold at an average price of $29.42, for a total value of $882,600.00. Following the completion of the sale, the insider directly owned 496,545 shares of the company's stock, valued at $14,608,353.90. This represents a 5.70% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Ondrej Vlcek sold 200,000 shares of the firm's stock in a transaction on Thursday, August 27th. The shares were sold at an average price of $30.00, for a total transaction of $6,000,000.00. Following the sale, the director owned 3,332,904 shares in the company, valued at $99,987,120. The trade was a 5.66% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 558,508 shares of company stock valued at $16,356,093 over the last three months. Corporate insiders own 9.70% of the company's stock.

Institutional Investors Weigh In On Gen Digital

Institutional investors and hedge funds have recently bought and sold shares of the business. Assenagon Asset Management S.A. acquired a new position in Gen Digital in the 2nd quarter worth approximately $25,920,000. Hsbc Holdings PLC raised its position in Gen Digital by 49.4% during the 2nd quarter. Hsbc Holdings PLC now owns 1,324,155 shares of the company's stock worth $32,976,000 after buying an additional 437,646 shares during the last quarter. Empowered Funds LLC purchased a new position in Gen Digital during the 2nd quarter worth approximately $12,705,000. The Manufacturers Life Insurance Company lifted its stake in Gen Digital by 17.9% during the 1st quarter. The Manufacturers Life Insurance Company now owns 384,754 shares of the company's stock valued at $7,245,000 after acquiring an additional 58,319 shares during the period. Finally, Bank of America Corp DE acquired a new stake in Gen Digital during the 2nd quarter valued at approximately $62,004,000. 81.38% of the stock is owned by institutional investors.

Gen Digital Price Performance

The firm has a market capitalization of $16.24 billion, a PE ratio of 15.79, a P/E/G ratio of 0.78 and a beta of 1.26. The firm's fifty day moving average price is $26.47 and its 200 day moving average price is $24.37. The company has a current ratio of 0.47, a quick ratio of 0.47 and a debt-to-equity ratio of 3.00.

Gen Digital Company Profile

Gen Digital Inc NASDAQ: GEN is a cybersecurity company that provides digital safety, privacy, and identity protection products for consumers. Its services are designed to help protect devices, personal information, online accounts, and digital identities from malware, fraud, identity theft, scams, and other cyber threats.

The company operates a portfolio of consumer brands that includes Norton, Avast, LifeLock, Avira, AVG, ReputationDefender, and CCleaner. Its offerings include antivirus and device security software, virtual private network services, password management, identity theft monitoring and restoration support, privacy tools, scam protection, and performance and optimization utilities.

Gen Digital serves customers internationally through direct subscriptions and distribution partnerships.

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