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What's in Store for NortonLifeLock (NLOK) This Earnings Season?

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NortonLifeLock, Inc. is scheduled to release second-quarter fiscal 2021 results on Nov 5.

The company projects quarterly revenues between $615 million and $625 million. The Zacks Consensus Estimate for revenues is pegged at $621.1 million, calling for a year-over-year increase of 2.2%.

The company projects non-GAAP earnings from continuing operations between 31 cents and 35 cents per share. The Zacks Consensus Estimate is pegged at 33 cents per share, suggesting a whopping 83.3% year-over-year growth.

The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in the other, the average surprise being approximately 60%.

Let’s see how things have shaped up for the upcoming announcement.

Factors at Play

NortonLifeLock’s fiscal second-quarter performance is anticipated to have benefited from the expansion of its Norton 360 memberships to more countries in the EMEA, Asia Pacific and Latin American regions, in a bid to offer a broader range of cyber safety products.

Moreover, a huge global workforce has been working remotely in order to contain the spread of the COVID-19 pandemic. However, more people logging into employers' networks requires greater security. This trend is likely to have spurred demand for the company’s products during the fiscal second quarter.

Apart from these, strong client retention and renewal rates are likely to have aided its second-quarter top-line performance. At the end of the fiscal first quarter, NortonLifeLock’s client-retention rate was 85%. The Norton antivirus maker’s sustained focus on growing partner channel and employee benefit programs is anticipated to have boosted its performance during the quarter under review.

Nonetheless, NortonLifeLock’s quarterly results will likely reflect the negative impact of revenue losses due to the divestment of the company’s enterprise security asset to Broadcom (AVGO) and ID Analytics business to LexisNexis Risk Solutions, part of RELX Plc (RELX).

What Our Model Says

Our proven model does not predict an earnings beat for NortonLifeLock this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

NortonLifeLock currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Sunoco LP (SUN - Free Report) has an Earnings ESP of +1.00% and sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hologic, Inc. (HOLX - Free Report) has an Earnings ESP of +20.90% and holds a Zacks Rank of 2, currently.

Marchex, Inc. (MCHX - Free Report) has an Earnings ESP of +16.67% and currently carries a Zacks Rank of 2.

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