Why Analysts Are Taming LifeLock Expectations Despite Improvements

LifeLock Inc. (NYSE: LOCK) had its share of problems with an FTC (Federal Trade Commission) issue before, and now its earnings gave sellers a reason to go in. This was LifeLock’s 43rd consecutive quarter of sequential growth in both revenue and cumulative ending members in the fourth quarter. As a result, a few analysts poured into the stock.

24/7 Wall St. has gathered a few analyst calls that followed LifeLock’s earnings report and we have made a brief montage of how they are viewing this company after it reported earnings. We also have included some highlights from the earnings report.

The company reported $0.30 in earnings per share (EPS) on $156.2 million in revenue for the fourth quarter, which compares to consensus EPS estimates that called for $0.30.

In terms of guidance, LifeLock expects to have a net loss of $0.08 to $0.07 per share on revenues in the range of $156 million to $158 million for the current quarter.

Merrill Lynch believes the company has recovering fundamentals but remains Neutral on the stock with a price objective of $12. The brokerage firm detailed in its report:

We see the latest quarter as an indication that fundamentals are beginning to recover with the business likely hitting full stride in 2H16. However, LT margin targets are also likely delayed as the company invests into R&D for security infrastructure and product development. We reiterate our Neutral rating and lower our PO to $12 from $15 to reflect lower market valuations.

A few other analysts weighed in on LifeLock:

  • Canaccord Genuity has a Buy rating and lowered the price target price to $15 from $17.
  • Deutsche Bank has a Buy rating and lowered its price target to $20 from $23.
  • Dougherty has a Buy rating and lowered its price target from $19 to $17.50.
  • S&P Capital IQ maintained a Buy rating.

Shares of LifeLock closed Friday at $10.03, with a consensus analyst price target of $16.44 and a 52-week trading range of $7.18 to $17.43.