McAfee Stock Gains Momentum Ahead of Quarterly Report

Keep an eye on MCFE ahead of earnings this week

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McAfee Corp. (NASDAQ:MCFE) is an American cloud cybersecurity software company, most known for its anti-virus computer software. The corporation provides various security, privacy, and trust solutions to consumers, small and medium-sized businesses, large enterprises, and governments in the U.S. and internationally.

McAfee launched its initial public offering (IPO) in October of 2020. However, unlike many other IPOs this past year, McAfee’s IPO has lacked the media attention and significant investor interest. A few months after going public, MCFE stock price bottomed at $14.80, down from its IPO price of $18.60. Nonetheless, McAfee stock has begun to pick up some steam recently, with about 30% growth in just the past three months. In fact, at the end of January, McAfee reached a record of $22.14. MCFE is currently trading up 13% year-to-date.

McAfee stock will look to extend its gains as it reports earnings for the second time since going public. McAfee will release its fourth quarter of 2020 financial results after market close on Tuesday, Feb. 23. For its first earnings report after going public, MCFE failed to meet analyst estimates, missing expectations by $0.01 margin. McAfee reported earnings of $0.34 per share for the third quarter of 2020. In MCFE's upcoming earnings report, the company is expected to post an earnings per share (EPS) of $0.31.

Overall, MCFE is an interesting value play. McAfee stock has a forward price-earnings ratio of 14.51 and continues to inch closer to profitability. In the past two years, McAfee’s net income has increased by more than $550 million. The company’s net losses in 2020 have totaled $50 million, opposed to $236 million in 2019 and $512 million in 2018. Additionally, its revenue has increased steadily since 2018, adding over $400 million to its top line. McAfee has generated over $2.8 billion in revenues this past year.

The biggest issue for the company is its massive debt load totaling $4.9 billion. However, one of the largest tech companies in the world, Intel (INTC), owns a large stake of McAfee which gives MCFE somewhat of a security blanket. McAfee stock also comes with a forward dividend $0.35 and a dividend yield of 1.79%. McAfee stock has the potential to reach $25-$30 if it begins to perform on the earnings front, making this week’s earnings vital for MCFE.

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