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VeriSign Inc VRSN

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Stock XNAS Rating as of
$180.58 −2.04 (1.12%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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VeriSign Earnings: China Continues to Drag on Domain Base, With Added Pressure From Soft US Market

Emma Williams

We maintain our $200 fair value estimate for wide-moat VeriSign following mixed first-quarter 2024 results. The .com and .net domain name base was once again hindered by soft registration demand in China in part due to a weaker local currency and burdensome local internet regulation. While these headwinds from China are an ongoing issue, we were surprised by persistent soft demand in the US as local domain registrars pivot focus to upselling to the base, raising retail prices and driving higher profitability, while pulling back on marketing efforts that target new customer growth.

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Price vs Fair Value

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VRSN is trading at a 8% discount.
Price
$184.74
Fair Value
$468.00
Uncertainty
Low
1-Star Price
$544.00
5-Star Price
$434.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

We expect Verisign to maximize price increases for the .com domain within the contractual limits, supporting further margin expansion.

Bears

While highly unlikely, the potential loss of the .com and .net contracts would lead to material value destruction for shareholders, given these contracts underpin practically all Verisign’s income.

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News

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Trading Information

Previous Close Price
$182.62
Day Range
$176.49–181.44
52-Week Range
$176.49–229.72
Bid/Ask
$180.33 / $181.05
Market Cap
$18.08 Bil
Volume/Avg
16 / 641,020

Key Statistics

Price/Earnings (Normalized)
25.57
Price/Sales
12.83
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
4.93%

Company Profile

Verisign is the sole authorized registry for several generic top-level domains, including the widely utilized .com and .net top-level domains. The company operates critical internet infrastructure to support the domain name system, including operating two of the world’s 13 root servers that are used to route internet traffic. In 2018, the firm sold off its Security Services business, signalling a renewed focus on the core registry business.
Sector
Technology
Industry
Software - Infrastructure
Stock Style Box
Mid Core
Total Number of Employees
908
Website
https://www.verisign.com

Competitors

Valuation

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Metric
VRSN
GOOGL
SQSP
Price/Earnings (Normalized)
 25.5726.491,015.74
Price/Book Value
 —6.86—
Price/Sales
 12.836.464.78
Price/Cash Flow
 21.3618.8033.73
Price/Earnings
VRSN
GOOGL
SQSP

Financial Strength

Metric
VRSN
GOOGL
SQSP
Quick Ratio
 0.771.940.54
Current Ratio
 0.812.100.68
Interest Coverage
 13.61266.752.17
Quick Ratio
VRSN
GOOGL
SQSP

Profitability

Metric
VRSN
GOOGL
SQSP
Return on Assets (Normalized)
 50.38%24.48%9.57%
Return on Equity (Normalized)
 —35.00%—
Return on Invested Capital (Normalized)
 455.34%30.54%28.43%
Return on Assets
VRSN
GOOGL
SQSP
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