Symantec’s stock price performance
Symantec (SYMC) rose ~16.6% in June despite the intense competitive environment and weakness in the business. The upside in the stock is probably due to investors’ optimism around the company’s efforts to grow its revenues in the near term. In comparison, Oracle (ORCL), IBM (IBM), and Microsoft (MSFT) have gained ~12.6%, ~8.6%, and ~8.3%, respectively, in June. The S&P 500 rose just 6.9% in the same period.
Symantec stock ended higher by 1.38% on Monday and closed at $22.06 per share. The stock gained 17.1% in the year-to-date period as of July 1, 2019.
Symantec’s performance in Q4
The antivirus software maker reported soft results for the fourth quarter of fiscal 2019 on May 9 and issued weak profit guidance for the first quarter of fiscal 2020. Symantec’s earnings were in-line with the estimates but declined in the double digits YoY in the fourth quarter due to lower revenues and massive spending in the Enterprise Security segment related to higher investments in the cloud business. Revenues not only lagged analysts’ expectations but also declined 3.2% YoY in Q4 2019. Total billings also fell 16% YoY in Q4, and Symantec lost small and medium business opportunities during the quarter, which further added to the weakness.
Symantec’s CEO also decided to step down during the fourth quarter after CFO Nicholas Noviello stepped down in the third quarter.
Growth expectations for fiscal 2020
We expect Symantec’s earnings and revenues to grow in fiscal 2020 as the company is working towards generating revenues in the enterprise security business. The company has planned to use the investments to increase revenues in the Enterprise segment.
For fiscal 2020, the company anticipates revenues to fall in the range of $4.76 billion to $4.9 billion, up from fiscal 2019 revenues of $4.762 billion. The company predicts enterprise segment revenue in the range of $2.3 billion to $2.4 billion, while it expects consumer cyber safety segment revenue in the range of $2.46 billion to $2.5 billion for fiscal 2020.