NortonLifeLock Continues Its Strong Growth and Margin Profile Streak in Q1; Maintaining $21 FVE

We are maintaining our $21 fair value estimate for no-moat NortonLifeLock after reporting first-quarter earnings. Top line growth and earnings in the quarter closely matched our anticipations and our fiscal 2022 outlook remains largely intact after NortonLifeLock reiterated yearly expectations initially stated in May. Although we believe NortonLifeLock is executing well in finding growth in consumer safety, building a security platform expanding beyond antivirus solutions, while keeping a very strong operating profile, we remain more cautious about the long-term competitive environment in consumer cybersecurity. We view shares as modestly overvalued and believe investors should wait for a larger margin of safety.