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New Products, New CEO at Symantec
11/10/2014 7:00 am EST
It looks like the revolving door of CEOs at this tech firm has finally come to an end, explains Rob DeFrancesco, editor of Tech Stock Prospector.
Symantec (SYMC) named Michael Brown permanent CEO. He had served as interim president and CEO since March.
Brown joined Symantec's board in 2005 and previously served as CEO of Quantum, where under his leadership, revenue doubled to $6 billion.
After years of mismanagement and scores of useless acquisitions, Symantec is slowly beginning to turn the corner. The recent separation of the sales force into two teams covering new business and renewals is starting to pay off in terms of improved performance.
This is good news for Fidelity and Loomis Sayles, which, in Q2, purchased 4.04 million shares and 3.75 million shares of Symantec, respectively. Fidelity is now among the ten largest investors in the company.
Symantec's new focus is on optimizing certain no-growth businesses such as Norton, while at the same time investing for growth in key segments such as back-up applications, mobile, advantage threat protection (ATP), managed security services, and data loss prevention (DLP).
The company is the No. 1 provider of back-up and recovery solutions, counting 99% of the Fortune 1000 as customers. In DLP, Symantec is considered the best of breed and has a larger market share than the next three competitors combined.
During the past two quarters, Symantec has introduced nearly two dozen new or improved products and is on track to release almost two dozen more by the end of fiscal 2015 (March). In the highly competitive cyber security segment, Symantec is late to ATP, so is playing a bit of catch up.
Symantec now has a management team in place that has begun to put together more consistently positive operating results.
At this point, the company's goal to get annual revenue growth back up to at least 5% appears ambitious: the consensus estimates for fiscal 2015 and fiscal 2016 indicate growth of 0.3% and 1.6%, respectively.
However, through a combination of new products, improved sales force, productivity, and smart M&A, SYMC has the ability to surprise to the upside over the coming years.
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