Symantec
Symantec Corporation, together with its subsidiaries, provides cybersecurity solutions worldwide. More info.
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Value
Is Symantec undervalued based on future cash flows and its price relative to the stock market?
Value is all about what a company is worth versus what price it is
available for. If you went into a grocery store and all the bananas were on sale
at half price, they could be considered
undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current
share
price of
Symantec
to its discounted cash flow analysis.value.The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
How is this discounted cash flow calculated?
- The current share price of Symantec is above its future cash flow value.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.The amount the stock market is willing to pay for Symantec's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are
Symantec's earnings available for a low price, and how does
this compare to other companies in the same industry?
- Symantec is good value based on earnings compared to the US Software industry average.
- Symantec is good value based on earnings compared to the US market.
Price based on expected Growth
Does
Symantec's expected growth come at a high price?
- Symantec earnings are not expected to grow next year, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on
Symantec's
assets?
- Symantec is good value based on assets compared to the US Software industry average.
Value checks
We assess Symantec's value by looking at:- Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
- Is the PE ratio less than the market average, and/ or less than the Software industry average (and greater than 0)? (2 checks)
- Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
- Is the PB ratio less than the Software industry average (and greater than 0)? (1 check) Symantec has a total score of 3/6, see the detailed checks below.
Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (-50.08%).
Full details on the Value part of the Simply Wall St company analysis model.
Discounted cash flow (2 Stage Free Cash Flow to Equity)
The calculations below outline how an intrinsic value for
Symantec
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our
documentation
to learn about this calculation.
| 2018 | 2019 | 2020 | 2021 | 2022 | |
| Levered FCF (USD, Millions) | $860.12 | $1,308.35 | $1,454.59 | $1,357.67 | $1,026.00 |
| Source | Analyst x14 | Analyst x13 | Analyst x7 | Analyst x3 | Analyst x1 |
|
Present Value Discounted (@ 11.67%) |
$770.24 | $1,049.19 | $1,044.57 | $873.08 | $590.85 |
Present value of next 5 years cash flows:
$4,328
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $1,026 × (1 + 2.47%) ÷ (11.67% – 2.47%)
Terminal value based on the Perpetuity Method where growth (g) =
2.47%:
$11,428
Present value of terminal value:
$6,581
Equity Value (Total value) = Present value of next 5 years cash flows +
terminal value
$10,909 =
$4,328 +
$6,581
Value = Total value / Shares Outstanding ($10,909 / 622)
Discount to Share Price
Value per share:
$17.55
Current discount (share price of $27.71): -57.87%
Estimate of Discount Rate
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 11.67% = 2.47% + (1.222 * 7.53%)
Estimate of Bottom Up Beta
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($17,222,835,936).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
1.222 = 0.929 (1 + (1- 2.7%) (32.44%))
Levered Beta used in calculation = 1.222
Assumptions
- The risk free rate of 2.47% is from the 10 year government bond rate in USD.
- The bottom-up beta is estimated by analysing other companies in the same industry.
- The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
- The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.
Future Performance
How is Symantec expected to perform in the next 1 to 3 years based on estimates from 26 analysts?
The future performance of a company is measured in the same way as past
performance, by looking at estimated
growth
and how much profit it is expected to make.Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Earnings growth vs Low Risk Savings
- Symantec's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 4.5%.
Growth vs Market Checks
- Symantec's earnings are expected to decrease over the next 1-3 years, this is below the US market average.
- Symantec's revenue growth is positive but not above the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
Past and Future Earnings per Share
Future performance checks
We assess Symantec's future performance by looking at:- Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
- Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
- Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
- Is the annual earnings growth rate expected to be above 20%? (1 check)
- Is the annual revenue growth rate expected to be above 20%? (1 check)
- Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Symantec has a total score of 1/6, see the detailed checks below.
Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.
Full details on the Future part of the Simply Wall St company analysis model.
Past Performance
How has Symantec performed over the past 5 years?
The past performance of a company can be measured by how much
growth
it has experienced and how much profit it makes relative to the funds and assets
it has available.
Past earnings growth
Past Earnings growth analysis
- Symantec's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.
- Symantec has become profitable in the last year making the earnings growth rate difficult to compare to the 5-year average.
- Symantec has become profitable in the last year making it difficult to compare the US Software industry average.
Earnings and Revenue History
Performance last year
We want to ensure a company is making the most of what it has available. This is
done by comparing the return (profit) to a company's available
funds,
assets
and
capital.
- Symantec has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
- Symantec used its assets less efficiently than the US Software industry average last year based on Return on Assets.
- It is difficult to establish if Symantec improved its use of capital last year versus 3 years ago (Return on Capital Employed) as it is currently loss-making.
Past performance checks
We assess Symantec's performance over the past 5 years by checking for:- Has earnings increased in past 5 years? (1 check)
- Has the earnings growth in the last year exceeded that of the Software industry? (1 check)
- Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
- Is the Return on Equity (ROE) higher than 20%? (1 check)
- Is the Return on Assets (ROA) above industry average? (1 check)
- Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
Symantec has a total score of 1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Full details on the Past part of the Simply Wall St company analysis model.
Health
How is Symantec's financial health and their level of debt?
A company's financial position is much like your own financial position,
it includes everything you own
(assets)
and owe
(liabilities).The boxes below represent the relative size of what makes up Symantec's finances.
The net worth of a company is the difference between its assets and liabilities.
- Symantec is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
- Symantec's long term commitments exceed its cash and other short term assets.
Balance sheet
Assets
Liabilities and shares
- Low level of unsold assets.
- Debt is not covered by short term assets, assets are 0.6x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t
bad,
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
- Symantec's level of debt (112.7%) compared to net worth is high (greater than 40%).
- The level of debt compared to net worth has increased over the past 5 years (59.6% vs 112.7% today).
- Debt is not well covered by operating cash flow (18.4%, less than 20% of total debt).
- Interest payments on debt are not well covered by earnings (EBIT is 1x annual interest expense, ideally 3x coverage).
Financial health checks
We assess Symantec's financial health by checking for:- Are short term assets greater than short term liabilities? (1 check)
- Are short term assets greater than long term liabilities? (1 check)
- Has the debt to equity ratio increased in the past 5 years? (1 check)
- Is the debt to equity ratio over 40%? (1 check)
- Is the debt covered by short term assets? (1 check)
- Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check) Symantec has a total score of 1/6, see the detailed checks below.
Full details on the Health part of the Simply Wall St company analysis model.
Dividends
What is Symantec's current dividend yield, its reliability and sustainability?
Dividends are regular cash payments to you from the company, similar to a
bank paying you interest on a savings account.
Annual Dividend Income
If you bought
$2,000 of
Symantec
shares you are expected to receive
$22
in your first year as a dividend.
Dividend Amount
- Symantec's dividend is below the low risk savings rate (1.42%).
- Symantec's dividend is below the markets top dividend payers (3.95%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not
wildly increasing/decreasing each year. This graph shows you the historical rate
to count toward your assessment of the stock.We also check to see if the dividend has increased in the past 10 years.
- Symantec has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).
- Symantec has only been paying a dividend for 5 years, and since then dividends per share have fallen.
Income/ dividend checks
We assess Symantec's dividend by checking for:- Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
- Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
- Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
- If they have paid a dividend for 10 years has it increased in this time? (1 check)
- How sustainable is the dividend, can Symantec afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks) Symantec has a total score of 2/6, see the detailed checks below.
Full details on the Dividends part of the Simply Wall St company analysis model.
Management
CEO
| COMPENSATION | $6,059,752 |
| AGE | 52 |
| TENURE AS CEO | 1.7 years |
CEO Bio
Mr. Gregory S. Clark, also known as Greg, is a Co-Founder at Anonyome Labs, Inc. He has been the Chief Executive Officer of Symantec Corporation since August 1, 2016. Mr. Clark served as the Chief Executive Officer of Blue Coat Systems Inc. since September 15, 2011 and Blue Coat, Inc. since September 2011. He has more than 23 years of experience and has a unique combination of technical depth, market insight and operational skills. He served as the President of Blue Coat Systems Inc. since September 15, 2011. Mr. Clark served as a Senior Operating Partner at Thoma Bravo, LLC. Mr. Clark served as the Chief Executive Officer and President of ABB Enterprise Software Pty Ltd (alternate name, Mincom Pty Ltd) from April 2008 to August 2011. Mr. Clark was the founder of E2open, Inc. He served as Chief Executive Officer of E2open, Inc. from 2001 to July 2008 and also served as its President. He was responsible for leading E2open's overall operations, focusing on the development of new products and technologies and the successful delivery of customer projects. He was an IBM Distinguished Engineer and Vice President of IBM's Tivoli Systems Inc. from 1999 to 2001, where he was instrumental in defining and selling IBM security and management products. Mr. Clark founded DASCOM, Inc. in 1994 and served as its Chairman, Chief Operating Officer and Chief Technology Officer. He was responsible for the strategic leadership of engineering, including product architecture, engineering process and the development efforts at DASCOM. He founded Dascom. He served as Chief Executive Officer of Ventyx Pty Ltd. since April 2008. He held senior roles with international IT companies, AT&T Unix Software Operation, UNIX System Laboratories and Stallion Technologies., a division of Bell Labs, responsible for the integration and support of UNIX technologies in the Pacific Rim. Mr. Clark spent several years as a key contributor and leader of the team that worked on the Portable Operating System Interface (POSIX) standard, UNIX ports to SMP hardware and ports of network management technology to telecommunications transmission equipment. Prior to USL, he worked in the advance manufacturing division of BDM Corporation and led the core technical team at the serial I/O hardware manufacturer Stallion Technologies. Mr. Clark was instrumental in the security standards arena, driving authorization standards in The Open Group, the Object Management Group, the Securities Industry Middleware Council and the Internet Engineering Task Force. He served as Chairman of Keynote Systems, Inc. He has been a Director of Symantec Corporation since August 1, 2016. He served as Director of Blue Coat Systems Inc. since September 15, 2011 and Blue Coat, Inc. since September 2011. He served as a Director of E2open, Inc. He served as a Director at Imperva Inc. from June 2014 to August 10, 2015. He served as a Director of Emulex Corporation from April 1, 2013 to May 5, 2015. He served as a Director of East Asia Minerals Corporation from May 3, 2011 to September 9, 2011. Mr. Clark has BS in Mathematics and Thermal Physics from Griffith University in Brisbane, Australia and attended the University of New Mexico for post-graduate studies in computer science.
CEO Compensation
- Symantec has a new CEO, we can't show their compensation history.
Management Team Tenure
Average tenure and age of the Symantec management team in years:
- The tenure for the Symantec management team is about average.
Management Team
Greg Clark
CEO & Director
$6M
52
1.7 yrs
Michael Fey
President & COO
$4M
42
1.7 yrs
Nick Noviello
Executive VP
$2M
48
1.3 yrs
Scott Taylor
Executive VP
$7M
53
9.7 yrs
Fran Rosch
Executive Vice President
$8M
53
Hugh Thompson
Chief Technology Officer
Cynthia Hiponia
Vice President of Investor Relations
Amy Cappellanti-Wolf
Senior VP & Chief HR Officer
52
3.8 yrs
Steve Trilling
Senior VP and GM of Security Analytics & Research
Balaji Yelamanchili
Executive VP & GM - Enterprise Security
$7M
55
3.4 yrs
Board of Directors Tenure
Average tenure and age of the Symantec board of directors in years:
- The tenure for the Symantec board of directors is about average.
Board of Directors
Dan Schulman
Non-Executive Chairman of the Board
$455K
59
5.3 yrs
Greg Clark
CEO & Director
$6M
52
1.7 yrs
Steve Miller
Independent Director
$380K
75
23.6 yrs
David Mahoney
Independent Director
$370K
63
15 yrs
Vincent Unruh
Independent Director
$370K
68
12.8 yrs
Frank Dangeard
Independent Director
$360K
59
11.3 yrs
Gerry Laybourne
Independent Director
$340K
70
10.3 yrs
Zan Vautrinot
Independent Director
$345K
57
4.5 yrs
Anita Sands
Independent Director
$345K
41
4.5 yrs
Kenneth Hao
Independent Director
$340K
48
2.1 yrs
Who owns this company?
Management checks
We assess Symantec's management by checking for:- Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
- Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
- Is the average tenure of the management team less than 2 years? (1 check)
- Is the average tenure of the board of directors team less than 3 years? (1 check) Symantec has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.
Note: We use the top 6 management executives and board members in our calculations.
Note 2: Insider trading include any internal stakeholders and these transactions .
Full details on the Management part of the Simply Wall St company analysis model.
Company News
External News
Simply Wall St News
Symantec Corporation (NASDAQ:SYMC): What Is Driving Earnings Margins?
To get some insight, this article will interpret Symantec's margin performance to assist in analysing the revenue and cost anatomy behind the earnings expectations for the future and the impact it has on shareholder returns relative to the wider industry. … Margin Calculation for SYMC Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 1.01 Billion ÷ 4.74 Billion = 21.27% The past five years have seen Symantec's margin contract, as a result of net income declining at -35.24% on average, which was more than the average fall in revenue of -10.33%, indicating that that the company's decline in the top line has also corresponded with a smaller portion flowing out as earnings. … Using Symantec's margin expectations as a way to understand projections for the future It is expected that margins will continue to contract, with annual revenue growth tipped at 2.48% and a -63.06% expected annual decline in net income.
Simply Wall St - – Full articleShould You Buy Symantec Corporation (NASDAQ:SYMC) At This PE Ratio?
Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for SYMC Price per share = $27.54 Earnings per share = $1.639 ∴ Price-Earnings Ratio = $27.54 ÷ $1.639 = 16.8x The P/E ratio itself doesn’t tell you a lot; however, it becomes very insightful when you compare it with other similar companies. … For example, if you are inadvertently comparing lower risk firms with SYMC, then SYMC’s P/E would naturally be lower than its peers, since investors would value those with lower risk with a higher price. … If this assumption does not hold true, SYMC’s lower P/E ratio may be because firms in our peer group are being overvalued by the market.
Simply Wall St - – Full articleIs It The Right Time To Buy Symantec Corporation (NASDAQ:SYMC)?
A question to answer is whether Symantec's current trading price of $25.91 reflective of the actual value of the large-cap? … This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again. … If you believe SYMC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable.
Simply Wall St - – Full articleIs Symantec Corporation (NASDAQ:SYMC) Expensive For A Reason? A Look At The Intrinsic Value
Using the most recent financial data, I am going to take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to today's value. … 5-year cash flow forecast 2018 2019 2020 2021 2022 Levered FCF ($, Millions) $740.88 $1,317.49 $1,313.73 $1,130.50 $1,020.00 Source Analyst x14 Analyst x14 Analyst x4 Analyst x2 Analyst x1 Present Value Discounted @ 10.71% $669.21 $1,074.92 $968.15 $752.53 $613.29 Present Value of 5-year Cash Flow (PVCF)= $4,078 After calculating the present value of future cash flows in the intial 5-year period we need to calculate the Terminal Value, which accounts for all the future cash flows beyond the first stage. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = $1,020 × (1 + 2.5%) ÷ (10.7% – 2.5%) = $12,684 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = $12,684 / ( 1 + 10.7%)5 = $7,627 The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is $11,705.
Simply Wall St - – Full articleDoes Symantec Corporation's (SYMC) Debt Level Pose A Serious Problem?
How does SYMC’s operating cash flow stack up against its debt? … NasdaqGS:SYMC Historical Debt Dec 5th 17 A simple way to determine whether the company has put debt into good use is to look at its operating cash flow against its debt obligation. … Last year, SYMC’s operating cash flow was 0.14x its current debt.
Simply Wall St - – Full articleIs Symantec Corporation (SYMC) An Industry Laggard Or Leader?
This rate is larger than the growth rate of the US stock market as a whole. … NasdaqGS:SYMC PE PEG Gauge Oct 20th 17 The software tech industry is trading at a PE ratio of 42x, above the broader US stock market PE of 22x. … If SYMC has been on your watchlist for a while, now may be the time to enter into the stock, if you like its ability to deliver growth and are not highly concentrated in the tech industry.
Simply Wall St - – Full articleCompany Info
Map
Description
Symantec Corporation, together with its subsidiaries, provides cybersecurity solutions worldwide. It operates through two segments, Consumer Digital Safety and Enterprise Security. The Consumer Digital Safety segment provides Norton-branded services that provide multi-layer security services across desktop and mobile operating systems, public Wi-Fi connections, and home networks to defend against online threats to individuals, families, and small businesses. This segment also offers LifeLock-branded identity protection services, such as identifying and notifying users of identity-related and other events, and assisting users in remediating their impact; and digital safety platform designed to protect information across devices, customer identities, and the connected homes and families. The Enterprise Security segment provides endpoint protection products, endpoint management, messaging protection products, information protection products, cyber security services, Website security, and advanced Web and cloud security offerings. Its enterprise endpoint, network security, and management offerings supports evolving endpoints and networks, as well as provides an integrated cyber defense platform. This segment delivers its solutions through various methods, such as software, appliance, software-as-a-service, and managed services. The company serves individuals, households, and small businesses; small, medium, and large enterprises; and government and public sector customers. It markets and sells its products and related services through direct sales force, direct marketing and co-marketing programs, e-commerce and telesales platforms, distributors, Internet-based resellers, system builders, Internet service providers, employee benefits providers, wireless carriers, retailers, original equipment manufacturers, and retail and online stores. Symantec Corporation was founded in 1982 and is headquartered in Mountain View, California.
Details
| Name: | Symantec Corporation |
| SYMC | |
| Exchange: | NasdaqGS |
| Founded: | 1982 |
| $17,222,835,936 | |
| 621,538,648 | |
| Website: | http://www.symantec.com |
| Address: |
Symantec Corporation 350 Ellis Street, Mountain View, California, 94043, United States |
Listings
| Exchange Symbol | Ticker Symbol | Security | Exchange | Country | Currency | Listed on | |
|---|---|---|---|---|---|---|---|
| NasdaqGS | SYMC | Common Stock | Nasdaq Global Select | US | USD | 23. Jun 1989 | |
| DB | SYM | Common Stock | Deutsche Boerse AG | DE | EUR | 23. Jun 1989 | |
| XTRA | SYM | Common Stock | XETRA Trading Platform | DE | EUR | 23. Jun 1989 | |
| WBAG | SYMC | Common Stock | Wiener Boerse AG | AT | EUR | 23. Jun 1989 | |
| BMV | SYMC * | Common Stock | Bolsa Mexicana de Valores | MX | MXN | 23. Jun 1989 |
Number of employees
Current staff
Industry
| Systems Software | |
| Software |
Company Analysis and Financial Data Status
| Area | Date |
|---|---|
| Company Analysis updated: | 2018/04/23 00:11 |
| Last estimates confirmation: | 2018/04/19 |
| Last earnings update: | 2017/12/29 |
| Last annual earnings update: | 2017/03/31 |
All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.
