Systems Software subsector
The Systems Software subsector generated returns of -0.76% over a five-day period. As a whole, the subgroup is trending downward due to a lower demand for personal computers. Companies in this industry include Oracle (ORCL), Microsoft (MSFT), Red Hat (RHT), CA (CA), and Symantec (SYMC).
As a whole, the year-to-date performance of these five stocks in the Technology Select Sector SPDR ETF (XLK) have fallen more than -4.5% compared to the flat performance from the S&P 500 and a -0.6% loss for XLK.
Symantec announces partnership with Box
On June 17, 2015, Symantec (SYMC) launched DLP 14, an improved version of Data Loss Prevention. DLP 14 is Symantec’s cloud-based security product that ensures total security for information storage, thus ruling out the possibility of a data breach. SYMC also announced a partnership with Box, a cloud storage provider. Symantec plans to develop a product that combines DLP 14 with the Box platform in order to provide greater control over a company’s data.
Analysts believe this product will help Symantec increase its customer base, which will increase its revenues.
Symantec trades at enterprise multiple of 2.34x
Analysts call Symantec (SYMC) a value stock. Investors seek stocks that trade at a low price relative to fundamentals such as sales and earnings.
The average enterprise-value-to-sales (EV-to-sales) for the System Software subsector is 3.93x. Symantec is trading at a much lower EV multiple of 2.34x. The forward EV-to-sales multiple for the company is 2.32x compared to the sector average of 3.71x. This shows that the stock is undervalued and might be trading at a discount to analysts’ estimates.
Symantec’s price target
Symantec shares are expected to reach $25.50 in the short term. Analysts’ stock price target for the company is $25.90 with a median target estimate of $25.20. Symantec is thus trading at a discount of 3.91% with respect to its median target and is thus an attractive buy at current levels.
Analysts’ target price is projected at a high of $29 and a low of $20 for Symantec stock.
Of 33 analysts covering this stock, eight have a “buy” recommendation, three have a “sell” recommendation, and 25 have a “hold” recommendation.