Gen Digital Inc. (GEN) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Gen Digital Inc.

Updated on October 31, 2026 · accounts published on October 28, 2026

A fast-growing, highly profitable software business carrying a heavy debt load

Gen Digital trades at a P/E of 15.0 over the last 12 months, 52 % below its sector median of 31.5, while revenue grew 27 % year on year.

• Is Gen Digital expensive or cheap? Its P/E of 15.0 over the last 12 months is 52 % below the 31.5 median of its technology peers.
• How is the business doing? Operating margin hit 43 % in fiscal 2026, a 12-year record and nearly double the 23 % average since 2015.
• How strong is the balance sheet? Net debt equals 5.5× EBITDA in fiscal 2026, almost four times the 1.5× considered tolerable for software.
• What to expect from the next earnings? Gen Digital reports on February 4, 2027; analysts expect EPS of $0.74 after 8 straight quarterly beats.
• Does it grow with real cash or by diluting shareholders? Free cash flow was 31 % of revenue in fiscal 2026, while stock-based pay took only 4.7 %, well under the 10 % limit.

Is Gen Digital expensive or cheap?

Gen Digital trades at a P/E of 15.0 over the last 12 months, 52 % below the 31.5 median of 314 technology companies. Its EV/EBITDA of 10.4× is also below its own five-year average of 13.0×, under the 90 % line that marks a tech stock as cheap on this measure. The free cash flow yield of 25 % over the last 12 months is far above the 10 % earnings yield, so cash generation runs well ahead of reported profit. The market has noticed some of this: the stock is up 15 % in 12 months and sits 5 % below its 52-week high of $31.41. Part of the discount reflects the debt discussed below.

How is the business doing?

Over the last 12 months revenue grew 27 % and EPS 52 %, so profit is rising almost twice as fast as sales. That shows in the margins: a 42 % operating margin over the last 12 months against a 23 % average for fiscal 2015-2026, plus a 23 % net margin. ROIC of 12.0 % beats the 8.2 % median of 458 sector peers by 3.8 points, yet it cleared 10 % in only 3 of the last 10 fiscal years, with a low of −0.6 % in 2017. The 47 % ROE looks far stronger than the ROIC because much of the capital behind the business is borrowed.

How strong is the balance sheet?

Net debt was $13.77 per share in fiscal 2026 ($14.43 of debt against $0.66 of cash), equal to 46 % of the current share price. The debt-to-equity ratio stands at 2.96 and the current ratio at 0.37 over the last 12 months, so short-term liabilities clearly exceed liquid assets. The Altman Z of 1.2 places Gen Digital in the danger zone, a reading that sits uneasily with a Piotroski score of 7 of 9, which points to improving operations. The dividend yields 1.7 % over the last 12 months and absorbed 32 % of fiscal 2026 earnings, a payout that leaves room for paying down debt.

What to expect from the next earnings?

On October 28, 2026 Gen Digital reported EPS of $0.74 against $0.72 expected, a 2.9 % beat and its eighth in the last 8 quarters. The beats have been steady rather than large, so the bar for February 4, 2027 is clear: analysts expect $0.74 again, flat with the quarter just reported. The fiscal 2027 EPS consensus has not moved in 30 days, holding at $2.93 across 5 analysts, and the revenue estimate is equally stable. Of the 21 analysts covering the stock, 10 rate it a buy, 10 a hold and 1 a sell, a split view that matches a profitable but indebted company.

Does it grow with real cash or by diluting shareholders?

In technology, generic ratios fall short: growth, pricing power and dilution through stock-based pay decide whether shareholders keep the gains. Gen Digital passes most of these tests. Its fiscal 2026 gross margin of 78.5 % clears the 70 % healthy level for software, and its Rule of 40 score of 45 sits above the elite line of 40. Stock-based pay of 4.7 % of revenue is well below the 10 % ceiling. Revenue per share grew 14.8 % a year over fiscal 2023-2026, just short of the 15 % benchmark. The two failures both come from capital: ROIC of 12.0 % misses the 15 % mark, and debt weighs on returns.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.