Gen Digital Inc. (GEN) DCF Valuation & Fundamental Primer
Gen Digital Inc. (GEN) currently trades at $26.26 with an enterprise value of $21.54B. Our proprietary institutional model rates Gen Digital Inc. at 75/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of 11.8% vs. historical growth of 8.9% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Gen Digital Inc. (GEN) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Gen Digital Inc. (GEN) 3-Scenario DCF Valuation Range
Institutional Software Quality Scorecard (75/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Solid cash generation with minor working capital absorption
Minimal dilution friction; management compensation aligned with shareholders
High-quality software margins with healthy balanced growth and profitability
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
- Low dilution friction: SBC is only 3.4% of revenue
- Healthy unit economics: 80.3% gross margin
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into GEN?
Market implies 11.8% annual revenue growth over next 5 years, in line with company run-rate.
Gen Digital Inc. (GEN) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $3.94B | $3.94B | $4.29B | $4.67B | $5.08B | $5.54B | $6.03B |
| Gross Profit | $3.16B | $3.16B | $3.44B | $3.75B | $4.08B | $4.45B | $4.84B |
| Operating Income (EBIT) | $1.61B | $1.61B | $1.75B | $1.91B | $2.08B | $2.27B | $2.47B |
| Stock-Based Compensation (SBC) | $134.0M | $134.2M | $146.2M | $159.2M | $173.4M | $188.9M | $205.7M |
| Unlevered Free Cash Flow (FCF) | $1.21B | $1.21B | $1.31B | $1.43B | $1.56B | $1.70B | $1.85B |
| SBC-Adjusted True Cash Flow | $1.07B | $1.07B | $1.17B | $1.27B | $1.39B | $1.51B | $1.64B |
Cybersecurity & Identity Peer Comparables Matrix
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Gen Digital Inc. | GEN | $16.19B | $3.94B | 80.3% | 30.6% | 39.6% | 3.4% | 6.2× |
| CrowdStrike Holdings | CRWD | $86.18B | $3.95B | 78.0% | 31.2% | 62.2% | 19.5% | 20.9× |
| Palo Alto Networks | PANW | $126.34B | $8.03B | 74.4% | 37.8% | 56.3% | 14.2% | 15.0× |
| Fortinet, Inc. | FTNT | $10.37B | $1.11B | 72.2% | 11.2% | 32.7% | 9.6% | 9.1× |
| Zscaler, Inc. | ZS | $32.45B | $2.76B | 74.5% | 21.4% | 47.4% | 12.7% | 11.4× |
| QLYS | QLYS | $34.99B | $2.79B | 80.6% | 14.5% | 31.1% | 16.3% | 12.0× |
| SentinelOne, Inc. | S | $51.61B | $4.26B | 82.7% | 24.6% | 50.9% | 13.7% | 11.5× |
| Peer Cohort Median Benchmark (N=6) | 76.3% | 23.0% | 49.1% | 13.9% | 11.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 6.2× | $24.20B | $16.19B | $26.26 | 0.0% |
| -20% Multiple Compression | 4.9× | $19.36B | $11.35B | $18.41 | -20.0% |
| -35% Multiple Compression | 4.0× | $15.73B | $7.72B | $12.52 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $19.68B | $11.67B | $18.92 | -18.7% |
Frequently Asked Questions: Gen Digital Inc. (GEN) Valuation
What is Gen Digital Inc. (GEN)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Gen Digital Inc. (GEN) has a Base Case implied value of $21.95 per share (with a Bear Case of $5.75 and a Bull Case of $41.10), compared to its current price of $26.26. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Gen Digital Inc. (GEN)'s Rule of 40 score and Free Cash Flow margin?
Gen Digital Inc. achieves a Rule of 40 score of 39.6%, combining a 8.9% revenue growth run-rate with a 30.6% TTM free cash flow margin on $3.94B in trailing twelve-month revenue. In the Cybersecurity & Identity peer cohort, the median Rule of 40 benchmark is 49.1%.
What revenue growth rate is priced into GEN stock according to Reverse-DCF analysis?
At $26.26 per share (Enterprise Value of $24.20B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 11.8%, compared to Gen Digital Inc.'s historical CAGR of 8.9%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Gen Digital Inc. compare to Cybersecurity & Identity software peers?
Gen Digital Inc. (GEN) earns an institutional Software Quality Score of 75/100 (Grade B+ — Quality Software Operator). Across its Cybersecurity & Identity peer group (CRWD, PANW, FTNT, ZS, QLYS), the cohort trades at a median EV/TTM Revenue multiple of 11.8× and a median gross margin of 76.3%.
How does Stock-Based Compensation (SBC) impact Gen Digital Inc. (GEN)'s valuation?
Gen Digital Inc. recorded $134.0M in TTM stock-based compensation (3.4% of revenue). When treating SBC as a cash-equivalent compensation expense, Gen Digital Inc.'s SBC-adjusted free cash flow yield is 6.6%, scoring 25/25 on our Shareholder Dilution Friction pillar.