Will Gen Digital (GEN) Continue Its Earnings Surprise Streak?

Investors are watching closely as Gen Digital (GEN) prepares to report earnings on August 7, 2025. The company has built a reputation for consistent earnings beats, and recent data suggests this trend could continue. With a Zacks Rank #2 (Buy) and a Value Style Score of B, Gen Digital is positioned to deliver another positive surprise, backed by improving fundamentals and attractive valuation metrics.

A History of Beating Estimates

Gen Digital has demonstrated a strong track record of exceeding earnings expectations. Over the past year, the company averaged an earnings surprise of +0.9%, signaling reliable performance. This consistency has not gone unnoticed: in the past 60 days alone, two analysts revised their fiscal 2026 earnings estimates upward, contributing to a Zacks Consensus Estimate increase of $0.04 to $2.43 per share.

This upward momentum aligns with the Zacks Earnings ESP (Expected Surprise Prediction) of +1.67%, a metric that forecasts the likelihood of an earnings beat. A positive ESP suggests investors have reason to anticipate another favorable report.

Valuation Metrics Signal a Bargain

Gen Digital's Value Style Score of B reflects its compelling valuation. Key metrics include a forward P/E ratio of 12.53, a PEG Ratio of 1, and a Price/Cash Flow ratio of 11.2X—all of which sit below industry averages. These figures indicate the stock is trading at a discount relative to its growth potential.

The Price/Sales ratio of 4.8X further underscores the stock's affordability, particularly in a market where growth stocks often command premium multiples. Analysts view this as a sign that Gen Digital is undervalued, creating an attractive entry point for investors.

The Case for a Zacks Rank #2 (Buy)

The Zacks Rank #2 (Buy) is no accident. This ranking combines earnings momentum, valuation, and growth prospects into a single score. Gen Digital's rank reflects its strong earnings surprise history, improving estimates, and favorable valuation. Additionally, its VGM Score of B—a composite of Value, Growth, and Momentum metrics—adds credibility to its upside potential.

Why Now Matters

With the earnings report just weeks away, the timing is critical. A beat could trigger upward revisions to future estimates, further narrowing the gap between Gen Digital's current valuation and its intrinsic value. The stock's Zacks Rank #2 (Buy) and supportive metrics suggest it is well-positioned to outperform in the coming months.

Investment Considerations

• Risk Factors: While Gen Digital's fundamentals are strong, investors should monitor macroeconomic conditions and sector-specific challenges.
• Entry Point: The current forward P/E of 12.53 offers a margin of safety for long-term investors.
• Catalyst: A positive earnings surprise on August 7 could drive momentum and valuation re-rating.

Final Take

Gen Digital's blend of a proven earnings surprise history, improving Zacks ESP, and compelling valuation metrics makes it a compelling Buy ahead of its August report. The Zacks Rank #2 and B-rated Value Style Score are not just signals—they're a roadmap for investors seeking a stock poised to deliver both short-term momentum and long-term value.

Stay tuned for the August 7 earnings release. This could be the catalyst Gen Digital needs to accelerate its upward trajectory.

Disclaimer: This analysis is for informational purposes only. Always conduct your own research and consult a financial advisor before making investment decisions.