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VeriSign Inc VRSN

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

VeriSign Benefits From Surging Internet Use, Posting Another Strong Quarter; FVE Raised to $173

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Wide-moat VeriSign reported strong fourth-quarter results, as revenue fell in line with FactSet consensus estimates and EPS topped both consensus and our expectations. Throughout 2020, VeriSign benefited from heightened demand as businesses and individuals relied on online services, while the company continued to do a good job securing its Internet infrastructure. We remain impressed with management’s ability to maintain the integrity and reliability of VeriSign’s Internet infrastructure amid the increased demand. In addition to our model roll, given the company’s ever-expanding domain name base, or DNB, strong renewal rates, and increased investments in core operations, we are raising our fair value estimate to $173 from $154. We continue to view shares as slightly overvalued.

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Company Profile

Business Description

VeriSign is the sole authorized registry for several generic top-level domains, including the widely utilized .com and .net top-level domains. Additionally, the company operates 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, signaling a renewed focus on the core registry business. VeriSign generates about 60% of its sales from the United States.

Contact
12061 Bluemont Way
Reston, VA, 20190
T +1 703 948-3200
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Classic Growth
Employees 909

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