In today’s fast-evolving technology landscape, cybersecurity remains a critical focus for investors seeking growth and stability. Gen Digital Inc. and Arqit Quantum Inc. both operate in the software infrastructure sector, offering innovative solutions to protect digital assets. While Gen Digital leverages extensive consumer cybersecurity products, Arqit pioneers quantum encryption technology. This article will explore their strengths and risks to help you decide which company fits best in your investment portfolio.
Table of contents
Companies Overview
I will begin the comparison between Gen Digital Inc. and Arqit Quantum Inc. by providing an overview of these two companies and their main differences.
Gen Digital Inc. Overview
Gen Digital Inc. specializes in cyber safety solutions for consumers across multiple regions including the US, Europe, and Asia Pacific. Its offerings include Norton 360, LifeLock identity protection, and various privacy tools designed to protect devices and personal information from online threats. Founded in 1982 and based in Tempe, Arizona, Gen Digital operates in the software infrastructure industry with a market cap of 16B USD.
Arqit Quantum Inc. Overview
Arqit Quantum Inc. provides cybersecurity services based on satellite and terrestrial platforms, focusing on encryption technology through its QuantumCloud product. The company enables devices to generate encryption keys securely via lightweight software agents. Founded recently in 2021 and headquartered in London, Arqit operates with a smaller workforce and a market cap of 416M USD in the software infrastructure sector.
Key similarities and differences
Both companies operate in the technology sector within software infrastructure and offer cybersecurity services. Gen Digital focuses on consumer cyber safety solutions globally with a broad product portfolio and larger scale, while Arqit emphasizes quantum encryption technology primarily in the UK, with a niche, innovative approach. Their market capitalizations and employee counts also differ significantly, reflecting distinct business sizes and stages.
Income Statement Comparison
This table compares the most recent full fiscal year income statement metrics for Gen Digital Inc. and Arqit Quantum Inc., highlighting their financial performance in 2025.
| Metric | Gen Digital Inc. | Arqit Quantum Inc. |
|---|---|---|
| Market Cap | 16.1B | 416M |
| Revenue | 3.94B | 530K |
| EBITDA | 2.03B | -36.8M |
| EBIT | 1.61B | -37.6M |
| Net Income | 643M | -35.3M |
| EPS | 1.04 | -2.56 |
| Fiscal Year | 2025 | 2025 |
Income Statement Interpretations
Gen Digital Inc.
Gen Digital Inc. showed steady revenue growth from $2.55B in 2021 to $3.94B in 2025, with net income rising from $554M to $643M in the same period. Gross and EBIT margins remained strong and favorable, although net margin slightly declined overall. The latest year saw moderate revenue growth of 3.55% and a 44% surge in EBIT, reflecting improved operational efficiency despite higher interest expenses.
Arqit Quantum Inc.
Arqit Quantum’s revenue expanded dramatically from $48K in 2021 to $530K in 2025, with net losses narrowing from -$272M to -$35M. Margins remain deeply negative, reflecting ongoing investment and losses typical for a young tech firm. The most recent year showed favorable revenue and gross profit growth over 80%, but EBIT declined 58%, indicating continuing operational challenges.
Which one has the stronger fundamentals?
Gen Digital presents stronger fundamentals with consistent positive net income, robust margins, and favorable growth in earnings per share. Arqit Quantum, while posting rapid revenue growth, still operates at large losses and negative margins. Both companies show favorable trends overall, but Gen Digital’s stability and profitability stand out compared to Arqit’s early-stage volatility and ongoing losses.
Financial Ratios Comparison
The table below presents the most recent financial ratios for Gen Digital Inc. (GEN) and Arqit Quantum Inc. (ARQQ) based on their fiscal year 2025 data, providing a clear side-by-side comparison.
| Ratios | Gen Digital Inc. (GEN) | Arqit Quantum Inc. (ARQQ) |
|---|---|---|
| ROE | 28.3% | -129.8% |
| ROIC | 7.8% | -127.5% |
| P/E | 25.4 | -15.1 |
| P/B | 7.19 | 19.62 |
| Current Ratio | 0.51 | 2.69 |
| Quick Ratio | 0.51 | 2.69 |
| D/E | 3.66 | 0.03 |
| Debt-to-Assets | 53.7% | 1.68% |
| Interest Coverage | 2.79 | -802.9 |
| Asset Turnover | 0.25 | 0.012 |
| Fixed Asset Turnover | 36.1 | 0.74 |
| Payout Ratio | 48.7% | 0% |
| Dividend Yield | 1.92% | 0% |
Interpretation of the Ratios
Gen Digital Inc.
Gen Digital shows strong profitability with a favorable net margin of 16.34% and return on equity at 28.34%, though its return on invested capital is neutral at 7.77%. Weaknesses include a low current ratio of 0.51, high debt-to-equity at 3.66, and elevated price-to-book ratio of 7.19, indicating financial leverage and valuation concerns. The company pays a dividend with a moderate yield of 1.92%, supported by stable payouts, but some caution is warranted given the mixed liquidity and leverage metrics.
Arqit Quantum Inc.
Arqit Quantum exhibits unfavorable profitability ratios with a net margin of -6668.49% and return on equity at -129.77%, reflecting significant losses. Its balance sheet shows strength with a current ratio of 2.69 and a very low debt-to-equity of 0.03, indicating low leverage and good short-term liquidity. The company does not pay dividends, likely due to its negative earnings and focus on growth and reinvestment in R&D, consistent with its early-stage profile.
Which one has the best ratios?
Gen Digital demonstrates more favorable profitability and return metrics but struggles with liquidity and high leverage, presenting mixed financial health. Arqit Quantum’s ratios reveal severe profitability challenges despite strong liquidity and low debt. Overall, Gen Digital’s ratios are slightly unfavorable but comparatively stronger, while Arqit’s ratios remain broadly unfavorable due to significant operating losses.
Strategic Positioning
This section compares the strategic positioning of Gen Digital Inc. and Arqit Quantum Inc., focusing on Market position, Key segments, and exposure to disruption:
Gen Digital Inc.
- Large market cap of 16B with established global presence; faces moderate competitive pressure.
- Focused on consumer cyber safety with diversified products including Norton 360, LifeLock, VPN, and privacy services.
- Operates in traditional cybersecurity with incremental innovation; less exposed to radical tech disruption.
Arqit Quantum Inc.
- Small market cap of 416M; operates in a niche UK cybersecurity market with higher volatility.
- Concentrates on quantum encryption solutions via QuantumCloud software for device security.
- Positioned in emerging quantum encryption technology, facing potential high disruption and growth.
Gen Digital Inc. vs Arqit Quantum Inc. Positioning
Gen Digital follows a diversified approach targeting broad consumer cybersecurity markets with multiple product lines, providing scale and stability. Arqit pursues a concentrated niche in quantum cybersecurity, offering innovation but with higher risk due to market and technology uncertainty.
Which has the best competitive advantage?
Both companies are currently shedding value relative to their cost of capital. Gen Digital shows declining profitability, while Arqit’s profitability is improving despite value destruction. Neither demonstrates a strong economic moat based on ROIC versus WACC analysis.
Stock Comparison
The stock price movements of Gen Digital Inc. and Arqit Quantum Inc. over the past year reveal significant bullish trends with deceleration, punctuated by recent bearish corrections and shifts in buyer-seller dynamics.
Trend Analysis
Gen Digital Inc. exhibited a bullish trend with a 17.89% price increase over the past 12 months, marked by deceleration and moderate volatility (std deviation 2.59). Recent weeks show a slight negative change of -0.99%, indicating a near-neutral short-term trend.
Arqit Quantum Inc. posted a strong bullish trend with a 93.6% gain over the year, also decelerating and exhibiting higher volatility (std deviation 11.75). Its recent trend sharply reversed with a -39.03% price drop, reflecting a bearish momentum in the short term.
Comparing both, Arqit Quantum Inc. delivered the highest market performance in the last year despite recent weakness, outperforming Gen Digital Inc.’s more moderate gains.
Target Prices
Analysts present a clear and optimistic target price consensus for both Gen Digital Inc. and Arqit Quantum Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Gen Digital Inc. | 32 | 31 | 31.5 |
| Arqit Quantum Inc. | 60 | 60 | 60 |
The target consensus for Gen Digital Inc. is about 20.7% above its current price of 26.1 USD, suggesting moderate upside potential. Arqit Quantum Inc.’s consensus target is significantly higher, approximately 125.6% above its current price of 26.6 USD, indicating strong growth expectations from analysts.
Analyst Opinions Comparison
This section compares analysts’ ratings and financial scores for Gen Digital Inc. and Arqit Quantum Inc.:
Rating Comparison
Gen Digital Inc. Rating
- Rating: B, status Very Favorable, indicating a strong rating overall.
- Discounted Cash Flow Score: 5, Very Favorable, suggesting undervaluation potential.
- ROE Score: 5, Very Favorable, showing efficient profit generation from equity.
- ROA Score: 3, Moderate, indicating average asset utilization efficiency.
- Debt To Equity Score: 1, Very Unfavorable, implying higher financial risk due to debt.
- Overall Score: 3, Moderate, representing an average financial standing.
Arqit Quantum Inc. Rating
- Rating: C, status Very Favorable, a lower rating than Gen.
- Discounted Cash Flow Score: 2, Moderate, indicating limited undervaluation.
- ROE Score: 1, Very Unfavorable, reflecting poor equity profit efficiency.
- ROA Score: 1, Very Unfavorable, indicating weak asset utilization.
- Debt To Equity Score: 4, Favorable, showing lower financial risk with less reliance on debt.
- Overall Score: 2, Moderate, but lower than Gen’s overall score.
Which one is the best rated?
Based strictly on the provided data, Gen Digital Inc. is better rated overall, with higher scores in discounted cash flow, ROE, and ROA. Arqit Quantum has a better debt-to-equity score but lower ratings and overall scores compared to Gen.
Scores Comparison
Here is a comparison of the financial health scores for Gen Digital Inc. and Arqit Quantum Inc.:
Gen Scores
- Altman Z-Score: 1.25, indicating financial distress.
- Piotroski Score: 6, reflecting average financial health.
Arqq Scores
- Altman Z-Score: -0.22, indicating financial distress.
- Piotroski Score: 2, reflecting very weak financial health.
Which company has the best scores?
Gen Digital Inc. shows a higher Piotroski Score (6 vs. 2), indicating stronger financial health, while both companies fall in the distress zone for Altman Z-Score. Gen’s scores are comparatively better based on the provided data.
Grades Comparison
The following presents a comparison of recent grades assigned to Gen Digital Inc. and Arqit Quantum Inc.:
Gen Digital Inc. Grades
This table summarizes recent grades assigned by reputable grading companies for Gen Digital Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2025-11-07 |
| Evercore ISI Group | Maintain | Outperform | 2025-11-07 |
| Morgan Stanley | Maintain | Equal Weight | 2025-09-02 |
| Barclays | Maintain | Equal Weight | 2025-08-08 |
| Wells Fargo | Maintain | Overweight | 2025-08-08 |
| RBC Capital | Maintain | Sector Perform | 2025-08-08 |
| Barclays | Maintain | Equal Weight | 2025-07-14 |
| RBC Capital | Maintain | Sector Perform | 2025-05-07 |
| Morgan Stanley | Maintain | Equal Weight | 2025-04-16 |
| RBC Capital | Maintain | Sector Perform | 2025-01-31 |
Grades for Gen Digital Inc. show a consistent pattern of moderate outlooks, mainly “Sector Perform” and “Equal Weight,” with occasional “Outperform” and “Overweight” ratings indicating cautious optimism.
Arqit Quantum Inc. Grades
This table summarizes recent grades assigned by a reputable grading company for Arqit Quantum Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| HC Wainwright & Co. | Maintain | Buy | 2025-10-13 |
| HC Wainwright & Co. | Maintain | Buy | 2025-09-18 |
| HC Wainwright & Co. | Maintain | Buy | 2024-12-31 |
| HC Wainwright & Co. | Maintain | Buy | 2024-12-06 |
| HC Wainwright & Co. | Maintain | Buy | 2024-07-11 |
| HC Wainwright & Co. | Maintain | Buy | 2024-05-29 |
| HC Wainwright & Co. | Maintain | Buy | 2024-05-15 |
| HC Wainwright & Co. | Maintain | Buy | 2023-11-22 |
| HC Wainwright & Co. | Maintain | Buy | 2023-09-27 |
| HC Wainwright & Co. | Maintain | Buy | 2023-09-26 |
Grades for Arqit Quantum Inc. consistently indicate a “Buy” rating over multiple dates, reflecting strong confidence from the sole grading company.
Which company has the best grades?
Arqit Quantum Inc. has received consistently stronger grades with all recent ratings as “Buy,” whereas Gen Digital Inc.’s grades are more mixed, centered around “Sector Perform” and “Equal Weight.” Investors might interpret Arqit’s grades as a more bullish signal compared to Gen Digital’s moderate outlook.
Strengths and Weaknesses
Below is a comparative overview of key strengths and weaknesses for Gen Digital Inc. (GEN) and Arqit Quantum Inc. (ARQQ) based on their recent financial and strategic data:
| Criterion | Gen Digital Inc. (GEN) | Arqit Quantum Inc. (ARQQ) |
|---|---|---|
| Diversification | Strong diversification with $3.9B in Cyber Safety and Identity Protection segments | Limited diversification, focused on quantum encryption technology |
| Profitability | Favorable net margin (16.34%) and ROE (28.34%) but ROIC slightly below WACC, indicating value erosion | Negative profitability with large net losses and negative ROIC, though improving ROIC trend |
| Innovation | Moderate innovation reflected by steady revenues and legacy segment shrinking | High innovation potential in quantum tech but currently unprofitable |
| Global presence | Established global presence with multiple product lines | Emerging global player in niche quantum security market |
| Market Share | Significant market share in cybersecurity segments | Small market share, early-stage technology adoption |
Key takeaways: Gen Digital displays strong profitability and market reach but faces challenges in capital efficiency and some financial ratios. Arqit Quantum shows promising innovation and improving profitability trends but remains financially unstable and concentrated in a niche market. Investors should weigh Gen’s stability against Arqit’s growth potential and risk.
Risk Analysis
Below is a comparative risk overview for Gen Digital Inc. (GEN) and Arqit Quantum Inc. (ARQQ) based on the most recent 2025 data.
| Metric | Gen Digital Inc. (GEN) | Arqit Quantum Inc. (ARQQ) |
|---|---|---|
| Market Risk | Beta 1.08 (moderate volatility) | Beta 2.41 (high volatility) |
| Debt level | High leverage, D/E 3.66 (unfavorable) | Very low leverage, D/E 0.03 (favorable) |
| Regulatory Risk | Moderate, operates globally with privacy laws impact | Moderate, UK-focused quantum encryption sector with evolving regulations |
| Operational Risk | Medium, 3,400 employees, complex product suite | High, small team (82 employees), early-stage technology |
| Environmental Risk | Low, software infrastructure sector | Low, software/cybersecurity sector |
| Geopolitical Risk | Moderate, global presence including volatile regions | Moderate, UK base but dependent on global tech adoption |
Gen Digital faces significant financial risk due to high debt and liquidity concerns, despite solid profitability. Arqit shows high market volatility and operational risk due to its nascent stage and very weak profitability metrics. Both are in the distress zone for bankruptcy risk, with Arqit’s financial stability being notably weaker.
Which Stock to Choose?
Gen Digital Inc. (GEN) shows steady income growth with a favorable net margin of 16.34% and ROE of 28.34%. However, its high debt levels and low current ratio are concerns, reflected in a slightly unfavorable overall ratio evaluation but a very favorable rating.
Arqit Quantum Inc. (ARQQ) exhibits rapid revenue growth but suffers from significant profitability losses, negative ROE, and a high unfavorable ratio profile. Its strong liquidity and low debt contrast with poor earnings yields and a moderate overall rating status.
For investors prioritizing financial stability and profitability, GEN might appear more favorable given its solid income and rating despite debt concerns. Conversely, those focused on high-growth potential and willing to accept higher risk could interpret ARQQ’s dynamic revenue expansion and improving profitability trend as promising.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Gen Digital Inc. and Arqit Quantum Inc. to enhance your investment decisions:
