VeriSign Earnings: 2024 Results and 2025 Outlook Largely in Line; Increasing Our Valuation

We increase our fair value estimate to $210 per share, from $195 previously, as wide-moat VeriSign reported decent fourth-quarter earnings. Results met FactSet consensus expectations for the quarter, and 2025 guidance also fell in line with expectations. Results and guidance contribute to modest model adjustments. The .com and .net base remains hindered by soft demand in China and ongoing weakness from US registrars. Management expects this headwind to begin to dissipate in 2025, with domain base growth expected to only decline negative 2.3% to negative 0.3%, versus negative 2.1% in 2024. We still expect a turn around in domain base growth and price increases to help revenue growth reaccelerate by 2027. VeriSign renewed its agreements with ICANN and the NTIA, for six years each, which we expected. We view shares as fairly valued.