Gen Digital (GEN) has been busy, combining higher reported revenue and a growing customer base with new AI focused security offerings such as the Gen Agent Trust Hub and Norton Neo, along with dividend and buyback activity.

At a share price of $24.60, Gen Digital has seen a 9.58% 7 day share price return after a weaker 30 and 90 day period, while its 3 and 5 year total shareholder returns remain positive, hinting that recent momentum is picking up again.

If AI security is on your radar after Gen Digital's latest products, you may wish to scan the wider opportunity set with our screener of 57 profitable AI stocks that aren't just burning cash.

With revenue of US$4.7b, net income of US$603 million, an intrinsic value estimate implying roughly a 32% discount, and a similar gap to analyst targets, you have to ask: is Gen Digital still mispriced, or is the market already accounting for future growth?

Most Popular Narrative: 24.7% Undervalued

With Gen Digital’s fair value estimate at $32.65 against a last close of $24.60, the most followed narrative sees a sizable valuation gap built on detailed cash flow and earnings assumptions.

The transition to a high margin, recurring revenue subscription model, now bolstered by MoneyLion's rapidly scaling, soon to be membership based financial wellness business, enhances revenue predictability, boosts ARPU, and expands operating margins, with further upside potential as financial wellness features and cross segment bundling are woven into the core offering.

Curious what kind of revenue pace, margin profile, and future P/E multiple are baked into that fair value line? The full narrative spells out those assumptions in detail, including how subscription economics, M&A synergies, and capital costs are wired into the model.

Result: Fair Value of $32.65 (UNDERVALUED)

However, that story can shift quickly if big tech pushes more built in security that squeezes Gen’s addressable market, or if recent M&A synergies prove harder to realize.

Build Your Own Gen Digital Narrative

If you see the numbers differently or want to stress test your own set of assumptions, you can put together a custom Gen Digital narrative in just a few minutes by starting with Do it your way.

A great starting point for your Gen Digital research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.