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Symantec's Moat Dries Up

We're downgrading the information security company's moat rating to 'none,' due to stale products and a shrinking market space, and we see the shares as overvalued today.


Ilya Kundozerov: We recently downgraded Symantec to a no-moat company. Symantec operates in the highly competitive information security industry, and we think that there are very few companies that can maintain a long-term, sustainable, competitive advantage. 

Symantec's consumer cybersecurity segment is under pressure from low-cost and free product offerings. This market space is also shrinking as more and more consumers are migrating to mobile devices such as smartphones and tablets, where the monetization of cybersecurity offerings has been difficult so far. Symantec is also one of the leading vendors in the corporate desktop and laptop protection market, where we view the company's products as becoming increasingly stale due to a lack of innovation in the face of growing sophistication of cyberattacks.

Ilya Kundozerov does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.