Sometimes bad things happen to good companies. Whether due to market forces or company-specific issues this can mean high-quality companies go into a funk.
And when they do it can present opportunities to buy their stock when they are down but not out. Eventually, their financial strength enables them to get back off the ground and become even stronger.
Here we look at three stocks that have had a rough go of it in 2020, but whose solid fundamentals point to better times ahead.
Can NortonLifeLock Fend off Competition?
NortonLifeLock (NASDAQ:NLOK) is down 28% this year. The maker of Norton anti-virus software and LifeLock solutions for personal and enterprise cybersecurity has been challenged by a flood of competition and anemic sales growth. It has not been alone.
Corporate customers are spreading their cybersecurity outlays over time these days instead making one big purchase. This has forced NortonLifeLock to rethink its strategy.
After a dismal performance in fiscal 2020, things are looking up. Revenue growth is expected to resume in 2021 when earnings are forecast to rebound 54% higher off a low base. Last quarter NortonLifeLock beat expectations on the top and bottom lines. The key average revenue per user (ARPU) metric increased and the cost structure improved.
This stock looks to be near an inflection point. Cybersecurity product demand is on the rise due to the prevalence of hacking events worldwide. It’s a business that is unfortunately here to stay.
Although NortonLifeLock faces more competition than when it was seemingly the only show in town many years ago, its customer base remains strong and its products are as valuable as ever.
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