Gen Digital Earnings: In-Line Results More Than Offset by Our Lower Growth Outlook; Trim Fair Value

We are lowering our fair value estimate for no-moat Gen Digital to $21 from $24 after the firm closed out fiscal 2023 with results meeting our expectations, but first-quarter guidance is below our prior forecast. We are also moderating our medium-term top-line growth estimate, which also contributed to our fair value estimate being trimmed. With shares down 2% after-hours, we view Gen’s shares as moderately undervalued. While we maintain our no moat rating for Gen, driven primarily by the commodity-like consumer cybersecurity market the firm operates in, we see a path to margin expansion as the firm seeks to build a more efficient business unit following its acquisition of Avast in fiscal 2023.