A month has gone by since the last earnings report for NortonLifeLock (NLOK - Free Report) . Shares have added about 5.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is NortonLifeLock due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
NortonLifeLock Beats Q1 Earnings & Revenue Estimates
NortonLifeLock reported first-quarter fiscal 2021 non-GAAP earnings of 31 cents per share that climbed 48% year over year. The figure also beat the Zacks Consensus Estimate of 21 cents. This outperformance was driven by strong execution and lower stranded costs.
Revenues grew 4% year over year to $614 million and beat the consensus mark of $598.4 million as well as.
Direct average revenue per user (ARPU) increased 2.3% year over year to $9.03. Continued stabilization of direct customer count was a positive.
In the fiscal first quarter, gross profit decreased 4.7% year over year to $528 million. However, gross margin expanded 80 basis points (bps) on a year-over-year basis to 86%.
Operating income on a non-GAAP basis jumped 39.6% year over year to $289 million. Operating margin was 47.1%, up significantly from the year-ago quarter’s 31.8%.
As of Jul 3, 2020, NortonLifeLock had $1.1 billion in cash and cash equivalents compared with the prior quarter’s $2.3 billion. Long-term debt was $2.84 billion, down from the $3.47 billion witnessed in the previous quarter.
Notably, cash from from operations was $170 million.
For the second quarter of fiscal 2021, NortonLifeLock projects revenues between $615 million and $625 million, suggesting 3-5% growth adjusting for ID Analytics revenues ($13 million).
Moreover, non-GAAP earnings from continuing operations are expected between 31 cents and 35 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 36.03% due to these changes.
Currently, NortonLifeLock has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise NortonLifeLock has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.