Why NortonLifeLock Stock Failed to Outperform the S&P Despite Steady Earnings Growth

NortonLifeLock Inc. (NASDAQ: NLOK) the stock price has risen only 20% from $19 at the end of 2018 to around $23 currently, mainly due to slight favorable moves in its P/S multiple and earnings. The company has seen a steady increase in revenue per share during this period, helped by a decline in the number of shares outstanding. Despite this, the stock failed to outperform the S&P, which rose around 55% in comparison over this period.

In our interactive dashboard, Why was the NortonLifeLock action moved: NLOK stock has gained 20% since 2018we break down the factors driving this movement.

NortonLifeLock’s

NLOK
Total revenue increased 14% from $2.46 billion in fiscal 2019 to $2.8 billion currently

  • NLOK’s total revenue increased sharply from $2.46 billion in fiscal year 2019 to $2.8 billion in fiscal year 22 (NLOK’s fiscal year ends in March), and is currently at about the same level.
  • As of FY22, approximately 60% of NLOK’s sales come from its consumer security segment, which earned $1.67 billion in FY22
  • Identity and information protection sales accounted for the remaining 40%, amounting to $1.13 billion in FY22.
  • For more details on NortonLifeLock earnings and peer comparison, see NortonLifeLock Revenue Comparison

Earnings per share increased 24% from $3.96 in fiscal 2019 to $4.89 currently

  • NLOK’s revenue fell from $2.46 billion in fiscal 2019 to $2.8 billion currently, while the number of shares outstanding rose from 620 million in fiscal 2019 at 571.4 million currently.
  • Because of this, the RPS has gone from $3.96 in fiscal year 2019 to $4.89 currently.

The Price-To-Sales (P/S) multiple for NortonLifeLock fell from 4.5x at the end of 2018 to almost 6x at the end of 2021, but has returned to 4.6x currently, still slightly above its level of 2018

  • Due to NLOK’s consistent performance since the end of 2018, its P/S multiple has increased sharply from 4.5x at the end of 2018 to 6x at the end of 2021.
  • However, due to heightened economic uncertainty weighing on all markets, the P/S multiple has declined, currently standing at around 4.6x.
  • For more details on the company’s EBITDA and the comparison with its peers, see NortonLifeLock EBITDA Comparison.

With inflation rising and the Fed raising interest rates, NortonLifeLock has fallen 29% this year. Can it fall more? See how far can NLOK stock go comparing its decline to previous stock market crashes. here is a summary of the performance of all stocks during previous stock market crashes.

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