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As you might know, NortonLifeLock Inc. (NASDAQ:NLOK) recently reported its quarterly numbers. Results were roughly in line with estimates, with revenues of US$707m and statutory earnings per share of US$1.41. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the three analysts covering NortonLifeLock are now predicting revenues of US$2.93b in 2023. If met, this would reflect a credible 4.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to step up 16% to US$1.73. Before this earnings report, the analysts had been forecasting revenues of US$2.93b and earnings per share (EPS) of US$1.73 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$27.23, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic NortonLifeLock analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$25.90. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that NortonLifeLock is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.4% annualised growth until the end of 2023. If achieved, this would be a much better result than the 11% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually for the foreseeable future. So although NortonLifeLock's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that NortonLifeLock's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$27.23, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on NortonLifeLock. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple NortonLifeLock analysts - going out to 2025, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for NortonLifeLock you should be aware of, and 1 of them can't be ignored.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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