NortonLifeLock Stock Has Returned Just 35% Since 2018: Here’s Why
NortonLifeLock Inc. (NASDAQ: NLOK) stock price rose only around 1.35x from $19 in 2018 end to over $25 currently, primarily due to favorable changes in its P/S multiple. Over the same period, the S&P 500 has returned almost 70%, double that of NLOK’s stock returns. Additionally, the company also witnessed a slight rise in revenues over this period, and a drop in the outstanding share count also supported the company’s stock price.
In our interactive dashboard, Why NortonLifeLock Stock Moved: NLOK Stock Has Gained 35% Since 2018, we break down the factors behind this move.
(A) NLOK’s Total Revenue has grown 7.5% from $2.6 billion in 2018 to $2.8 billion on an LTM basis
- NLOK’s total revenue has seen a slow rise over the past few years, increasing from $2.6 billion in FY ’18 to $2.8 billion on an LTM basis (NLOK’s fiscal year ends in March).
- The company’s sales first dropped from $2.6 billion in FY ’18 to $2.5 billion in FY ’19, before slowly recovering back to $2.6 billion by FY ’21, and now rising to $2.8 billion.
- NLOK is a provider of cybersecurity software and services, and consumer security makes up almost 60% of the company’s sales at $1.51 billion.
- For details about NLOK revenues and comparison to peers, see NortonLifeLock (NLOK) Revenue Comparison
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(B) Revenue per share (RPS) increased 15% from $4.16 in 2018 to $4.77 currently
- NLOK revenue rose from $2.6 billion in 2018 to $2.8 billion currently, while the outstanding share count decreased from 615.1 million in 2018 to 577.1 million currently.
- Due to this, RPS has risen from $4.16 in FY ’18 to $4.77 currently.
(C) Price-To-Sales (P/S) multiple for NLOK rose strongly from 4.3x in 2018 to 5.9x by 2021 end, but has pulled back to 5.4x currently, still around 25% higher than its 2018 level
- Despite NLOK’s slow growth between 2018-end to 2021, its P/S multiple rose steadily from 4.3x in 2018 to as high as 5.9x in late-2021, on the back of rising investor expectations surrounding a rise in demand for internet security products.
- However, current geopolitical tensions have led to increased uncertainty in the broader markets, and the P/S multiple has pulled back, currently standing at around 5.4x.
- For additional details about the company stock returns and comparison to peers, see NortonLifeLock (NLOK) Stock Return Comparison.
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| Returns | Apr 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| NLOK Return | -4% | -2% | 6% |
| S&P 500 Return | -7% | -11% | 89% |
| Trefis Multi-Strategy Portfolio | -7% | -14% | 239% |
[1] Month-to-date and year-to-date as of 4/25/2022
[2] Cumulative total returns since the end of 2016
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