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VeriSign Inc VRSN

Morningstar Rating
$184.12 +1.16 (0.63%)
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Company Report

Verisign Enjoys Higher Domain Pricing Under Lucrative Registry Agreements

Verisign provides registry services for several top-level domains, or TLDs, and infrastructure essential to the functioning of the internet. Verisign plays a vital role in supporting the Domain Name System, or DNS, which is akin to a massive address book that matches human friendly domain names to the accompanying numbers-based Internet Protocol, or IP, address. This allows an end user to browse the internet and access requested content via a network of interconnected servers. The company operates software and infrastructure globally to support the translation of domain names to IP addresses for its assigned domains, including managing zone files and registration and policies for the specified domain. Verisign also provides root zone maintenance services, operates two of the world’s 13 roots servers that are foundational to the DNS, and manages a shared registration system that allows registrars to query the availability of and manage second level domains.

Price vs Fair Value

VRSN is trading at a 8% discount.
Price
$184.12
Fair Value
$251.00
Uncertainty
Low
1-Star Price
$417.00
5-Star Price
$215.00
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

Trading Information

Previous Close Price
$182.96
Day Range
$183.16186.62
52-Week Range
$181.57229.72
Bid/Ask
$180.00 / $184.00
Market Cap
$18.44 Bil
Volume/Avg
609,330 / 611,553

Key Statistics

Price/Earnings (Normalized)
25.27
Price/Sales
12.68
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
4.89%

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

Competitors

Valuation

Metric
VRSN
GOOGL
SQSP
Price/Earnings (Normalized)
25.2726.40988.70
Price/Book Value
6.84
Price/Sales
12.686.434.65
Price/Cash Flow
21.1118.7332.84
Price/Earnings
VRSN
GOOGL
SQSP

Financial Strength

Metric
VRSN
GOOGL
SQSP
Quick Ratio
0.791.940.54
Current Ratio
0.832.100.68
Interest Coverage
13.36266.752.17
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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