Symantec Shows Momentum: Is it Part of Your Portfolio?
Shares of Symantec Corp. (SYMC) have generated a return of 16.1% over the last 3 months. The company also delivered a positive earnings surprise of 10.8% in the last reported quarter.
The price appreciation can be attributed to Symantec’s Managed Security Services Advanced Threat Protection, which helps organizations to assess the level of vulnerabilities, detect threats and mitigate intellectual property theft.
Cyber security is growing into a major concern for organizations of all sizes. The growing security threats and hacking attacks in the past year or so revealed the increasing sophistication of the hackers and innovative hacking techniques. In order to tap this potential, the company unveiled a new method for advanced threat protection (ATP.TO), which strengthened its attack prevention solutions. Symantec’s expanded cybersecurity suite is likely to meet growing business needs.
The small and mid-sized business (SMB) segment is particularly attractive because potential cost savings are driving players to adopt cloud computing, which in turn is making them more vulnerable. Symantec’s recently-unveiled Norton Anti-virus software for small businesses should help secure and manage these information-driven businesses.
The Internet security market is an attractive area at the worst of times because of increasing web traffic. Hardware and software functionality including segments like firewalls, VPNs, intrusion prevention and detection and multi-purpose security known as unified threat management, are therefore expected to contribute to Symantec’s growth.
Furthermore, Symantec provides a broad range of content security and information backup solutions to individuals and enterprises. Moreover, the company’s mobile and cloud security products are gradually gaining market acceptance. The storage and server management business provides recovery solutions and heterogeneous storage-end server platforms. We believe these innovative products and solutions will help Symantec to win customers, thereby increasing business volume.
However, the weak PC market is affecting the sales of Symantec’s security solutions. As per the latest report from IDC, PC shipments will drop 3.7% in 2014, the third consecutive year of decline. This will affect the sale of Symantec’s PC security solutions to a considerable extent as well as its business volume. To counter this decline, the company is concentrating more on the mobile business, which enabled it to generate additional volumes.
Nevertheless, the company faces increased competition from other bellwethers such as Microsoft (MSFT) and Hewlett-Packard Company (HPQ).
Currently, Symantec has a Zacks Rank #3 (Hold). A better-ranked stock worth considering in the technology sector is Micron Technology (MU), carrying a Zacks Rank #1 (Strong Buy).
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