Shares of NortonLifeLock Inc. surged Wednesday toward a more than 15-month high, after BofA Securities analyst Tal Liani swung to bullish from bearish on the consumer cyber safety company following “strong” fourth-quarter results and upbeat management commentary.
On Tuesday, the stock soared 10.8% after the company reported fourth-quarter profit and revenue that beat expectations, provided upbeat financial guidance and increased its stock repurchase program.
The 18.7% jump over the past two days is the stock’s best two-day performance since it gained 21.3% in the two days ending Oct. 3, 2001.
Liani double upgraded NortonLifeLock to buy from underperform. He boosted his stock price target by 58% to $30, which is 20.5% above current prices. Liani’s previous price target of $19 is now 23.7% below current prices.
“We were previously concerned about low growth and weak sales channels, yet the company demonstrated improvements on multiple fronts such as better growth, which was directly correlated with the solid execution of management’s strategy combined with high margin and cash flow generation, all of which are driving our double upgrade,” Liani wrote in a note to clients.
In the coming few years, Liani sees the company benefiting from a “growth renaissance” in the consumer security market in the coming few years, which management said at the analyst day was a “massively underpenetrated market.”
Liani said the underpenetration leaves room for NortonLifeLock to grow its subscriber base. International expansion is another area of potential further market penetration, as management indicated that international revenue currently made up 30% of total revenue.
The stock has run up 20.5% year to date, while the S&P 500 has advanced 8.2%.