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NortonLifeLock Inc NLOK

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Morningstar’s Analysis

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NortonLifeLock Posts Strong Q3; Growth Acceleration Ahead; Raising FVE to $19

Mark Cash Senior Equity Analyst

Analyst Note

| Mark Cash |

No-moat NortonLifeLock’s 3% year-over-year revenue growth (6% growth excluding divested ID Analytics business) and non-GAAP EPS of $0.38 slightly topped FactSet consensus estimates in the third fiscal quarter. The company had solid demand through the holiday season, is expanding internationally, and channel partnerships are gaining traction. Adjusted operating margin was 51%, up from 36.2% a year ago, showcasing the concerted cost extraction efforts management has taken since jettisoning the Symantec enterprise security business. With higher expectations around growth internationally and the overall ability to upsell and retain customers, we are raising our fair value estimate to $19 from $17 and still view shares as overvalued.

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Company Profile

Business Description

NortonLifeLock sells cybersecurity and identity protection for individual consumers through its Norton antivirus and LifeLock brands. The company divested the Symantec enterprise security business to Broadcom in 2019. The Arizona-based company was founded in 1982, went public in 1989, and sells its solutions worldwide.

60 E. Rio Salado Parkway, Suite 1000
Tempe, AZ, 85281
T +1 650 527-8000
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Dec 31, 2020
Fiscal Year End Apr 3, 2021
Stock Type Slow Growth
Employees 3,600