Gen Digital's (GEN) potential acquisition of GoDaddy (GDDY) could be a sizable, transformational deal, whereas the focus previously had been on net leverage levels and tuck-in deals such as Trellis, or other customer interest areas as more likely near-term uses of capital, RBC Capital Markets said.

Shares of Gen Digital were down 7% following the acquisition report and have fallen about 17% over the last five days. The company is unlikely to comment on the speculation given the quiet period ahead of fiscal Q2 earnings, according to the note Thursday.

RBC believes a deal could make sense from a customer perspective, as GoDaddy ended last quarter with 20.5 million customers, while Gen Digital had 81 million total paid customers, with potential opportunities for cross-selling, the note added.

The investment firm said Gen Digital's accelerating growth profile was an important aspect of its story, but could be less in focus with such an acquisition, although GoDaddy's margin improvement would likely be in focus.

RBC kept a sector perform rating on Gen Digital and lowered its price target to $26 from $30.

The company's shares were down 3% in Friday trading.

Price: 22.38, Change: -0.70, Percent Change: -3.01