Factors weighing on Symantec stock
Earlier in this series, we discussed the factors that urged several analysts and research firms to downgrade and reduce the price target for Symantec (SYMC) stock. Although Symantec reported growth, its fiscal 3Q18 revenues failed to meet analysts’ expectations. Also, the company lowered its revenue and non-GAAP[1. generally accepted accounting principles] earnings guidance for the current quarter and fiscal 2018.
The lowered rating and guidance had a significant impact on Symantec stock. Symantec has had a mixed history of meeting or exceeding analysts’ expectations.
Increasing competition in the cybersecurity space and the continuing consolidation has added to the pressure on Symantec stock. Although Symantec leads the endpoint protection space, relatively new companies like Palo Alto Networks (PANW) and FireEye (FEYE) are growing rapidly. PANW recently entered the endpoint protection space.
Despite rising competition, Symantec garnered industry recognition for its unique and bold predictions, as the chart above shows.
Symantec’s stock performance versus the S&P 500 Index
Since the beginning of this year, Symantec stock has fallen more than 5.0%, and it has lost close to 8.5% in the last year. During the same period, the S&P 500 Index (VOO) has risen ~15.0%. Notably, calendar 2017 was a particularly stellar year for the tech-heavy (QQQ) S&P 500 Index.
The PureFunds ISE Cyber Security ETF (HACK) is the first exchange-traded fund in the market that focuses on cybersecurity. HACK has a portfolio of 32 cybersecurity stocks and invests ~5.0% of its portfolio holdings in Symantec. In the past year, HACK has risen ~11.0%.