Gen Digital (NASDAQ:GEN) Shares Gap Up on Strong Earnings

Shares of Gen Digital Inc. (NASDAQ:GEN) gapped up before the market opened on Thursday following a better than expected earnings announcement. The stock had previously closed at $24.35, but opened at $26.90. Gen Digital shares last traded at $27.7720, with a volume of 1,500,479 shares traded.

The company reported $0.74 earnings per share for the quarter, beating the consensus estimate of $0.72 by $0.02. Gen Digital had a return on equity of 55.93% and a net margin of 20.73%. The company had revenue of $1.37 billion during the quarter, compared to analysts’ expectations of $1.34 billion. During the same period last year, the business earned $0.62 earnings per share. Gen Digital’s quarterly revenue was up 12.2% on a year-over-year basis.

Gen Digital Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, December 9th. Stockholders of record on Monday, November 16th will be paid a dividend of $0.1250 per share. The ex-dividend date of this dividend is Monday, November 16th. This represents a $0.50 dividend on an annualized basis and a dividend yield of 1.8%. Gen Digital’s dividend payout ratio (DPR) is presently 29.07%.

Trending Headlines about Gen Digital

Here are the key news stories impacting Gen Digital this week:

• Positive Sentiment: Earnings and revenue beat expectations: Gen Digital reported adjusted earnings of $0.74 per share, above the $0.72 consensus estimate, while revenue rose 12.2% year over year to $1.37 billion, exceeding forecasts of $1.34 billion. EPS increased from $0.62 in the prior-year quarter. Gen Digital Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: Management raised its outlook: Gen increased its fiscal 2027 revenue forecast, citing strong cybersecurity demand. The upgraded guidance strengthens the growth outlook and was a key catalyst for the stock. Gen Digital raises annual revenue forecast on strong cybersecurity demand
• Positive Sentiment: Partner-channel momentum was strong: Partner revenue grew 40% year over year to $295 million, supporting Gen’s ability to expand distribution and sustain double-digit growth. Gen Digital: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Dividend continued: Gen declared a quarterly cash dividend of $0.125 per share, payable December 9 to shareholders of record November 16. The annualized payout is $0.50 per share, representing an approximately 2.1% yield. Gen Digital approves regular quarterly cash dividend
• Neutral Sentiment: Weakness in other cybersecurity shares, including Fortinet and Tenable, highlighted broader sector volatility, although Gen Digital outperformed those names following its results. Fortinet plunges after-hours as Gen Digital rises
• Negative Sentiment: Technical pressure remains a risk: Gen Digital recently crossed below its 200-day moving average, which could encourage caution among momentum-focused investors despite the favorable earnings results. Gen Digital stock crosses below 200-day moving average

Wall Street Analyst Weigh In

Several equities analysts recently issued reports on GEN shares. Wells Fargo & Company boosted their target price on shares of Gen Digital from $22.00 to $28.00 and gave the company an “equal weight” rating in a research note on Friday, August 7th. Barclays raised their price target on shares of Gen Digital from $27.00 to $32.00 and gave the company an “equal weight” rating in a research report on Friday, August 7th. Royal Bank Of Canada cut their price objective on shares of Gen Digital from $26.00 to $24.00 and set a “sector perform” rating for the company in a report on Monday, October 12th. Wall Street Zen downgraded shares of Gen Digital from a “buy” rating to a “hold” rating in a research report on Sunday, August 16th. Finally, Weiss Ratings upgraded shares of Gen Digital from a “hold (c)” rating to a “hold (c+)” rating in a research report on Friday, October 16th. One equities research analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating and six have issued a Hold rating to the stock. Based on data from MarketBeat, the company currently has an average rating of “Hold” and a consensus target price of $30.25.

Insiders Place Their Bets

In other Gen Digital news, COO Bryan Seuk Ko sold 28,248 shares of the stock in a transaction that occurred on Friday, September 4th. The stock was sold at an average price of $30.67, for a total transaction of $866,366.16. Following the completion of the transaction, the chief operating officer owned 744,262 shares of the company’s stock, valued at $22,826,515.54. This represents a 3.66% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Travis Witteveen sold 30,000 shares of the stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $29.42, for a total value of $882,600.00. Following the transaction, the insider directly owned 496,545 shares of the company’s stock, valued at $14,608,353.90. The trade was a 5.70% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders sold 558,508 shares of company stock worth $16,356,093. Corporate insiders own 9.70% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in GEN. Grove Bank & Trust lifted its position in shares of Gen Digital by 452.2% during the 2nd quarter. Grove Bank & Trust now owns 1,132 shares of the company’s stock worth $28,000 after purchasing an additional 927 shares during the last quarter. MassMutual Private Wealth & Trust FSB increased its holdings in Gen Digital by 86.9% in the second quarter. MassMutual Private Wealth & Trust FSB now owns 1,921 shares of the company’s stock valued at $48,000 after buying an additional 893 shares during the last quarter. Dunhill Financial LLC acquired a new stake in Gen Digital in the second quarter valued at $50,000. Pension & Wealth Management Advisors Inc. acquired a new stake in Gen Digital in the third quarter valued at $47,000. Finally, Weiss Asset Management LP acquired a new stake in Gen Digital in the first quarter valued at $41,000. 81.38% of the stock is owned by institutional investors and hedge funds.

Gen Digital Price Performance

The company has a market capitalization of $16.24 billion, a PE ratio of 15.79, a P/E/G ratio of 0.78 and a beta of 1.26. The company has a current ratio of 0.47, a quick ratio of 0.47 and a debt-to-equity ratio of 3.00. The stock has a fifty day simple moving average of $26.47 and a 200-day simple moving average of $24.37.

About Gen Digital

Gen Digital Inc (NASDAQ: GEN) is a cybersecurity company that provides digital safety, privacy, and identity protection products for consumers. Its services are designed to help protect devices, personal information, online accounts, and digital identities from malware, fraud, identity theft, scams, and other cyber threats.

The company operates a portfolio of consumer brands that includes Norton, Avast, LifeLock, Avira, AVG, ReputationDefender, and CCleaner. Its offerings include antivirus and device security software, virtual private network services, password management, identity theft monitoring and restoration support, privacy tools, scam protection, and performance and optimization utilities.

Gen Digital serves customers internationally through direct subscriptions and distribution partnerships.