Verisign (VRSN) AI Stock Analysis

• Market Cap: $22.34B
• Dividend Yield: 0.94%
• Average Volume (3M): 525.74K
• Price to Earnings (P/E): 28.1
• Beta (1Y): 0.50
• Revenue Growth: 5.47%
• EPS Growth: -0.03%
• Country: US
• Employees: 929
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 2.23
• Shares Outstanding: 92,700,000
• 10 Day Avg. Volume: 706,777
• 30 Day Avg. Volume: 525,744
• PEG Ratio: 9.67
• Price to Book (P/B): -12.72
• Price to Sales (P/S): 62.24
• P/FCF Ratio: 86.09
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 14.78
• Enterprise Value/Gross Profit: 16.80
• Enterprise Value/Ebitda: 20.80
• 1Y Price Target: $304.00
• Price Target Upside: 25.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $263.00 ▲(8.40% Upside)

The score is driven primarily by strong underlying profitability/cash flow and a constructive earnings outlook with continued capital returns. Offsetting these positives are balance-sheet risk from persistent negative equity, weaker current technical momentum, and a valuation multiple that looks demanding relative to modest growth guidance.

Positive Factors

Durable Registry Monopoly

Control of the .com and .net registries creates a structurally defensive, highly sticky business with recurring registrar fees and renewal revenue. This essential infrastructure role gives enduring pricing power, high customer retention, and limited direct competition over the medium term.

Very high margins

Consistently very high gross and operating margins reflect a capital-light, scaleable registry model with low incremental costs. These margins support durable profitability, reinvestment capacity, and the ability to fund shareholder returns even if top-line growth moderates over the next several quarters.

Strong cash generation & returns

Sustained ~ $1.07B free cash flow and $1.1B of 2025 capital returns demonstrate robust cash conversion and disciplined capital allocation. Reliable FCF supports ongoing buybacks and a growing dividend, underpinning long‑term shareholder returns and financial flexibility.

Negative Factors

Negative shareholders' equity

Persistently negative equity reduces financial cushions and complicates leverage assessment, limiting balance‑sheet flexibility in stress scenarios. It increases vulnerability to asset shocks, constrains optionality for large M&A or sustained buybacks, and raises governance scrutiny over time.

Moderate growth outlook

Low-to-mid single-digit domain growth guidance reflects a mature registry market, capping top-line expansion over the medium term. With limited organic growth levers, revenue upside relies on price changes or diversification, making sustained EPS expansion more dependent on margin and buyback execution.

Elevated capex & cost pressures

Higher 2026 capex for equipment replacement and capacity expansion amid AI-driven supply pressures increases near‑term cash needs and capital intensity. Coupled with rising tax and net interest expense, this can compress free cash flow growth and limit incremental funds available for returns or strategic investments.

Verisign Business Overview & Revenue Model

Company Description

VeriSign, Inc., together with its subsidiaries, provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names worldwide. It enables the security, stability, and resiliency of internet infrastructure and services, including providing root zone maintainer services, operating two of the 13 internet root servers; and offering registration services and authoritative resolution for the .com and .net domains, which support global e-commerce. The company also back-end systems for .cc, .gov, .edu, and .name domain names, as well as operates distributed servers, networking, security, and data integrity services. VeriSign, Inc. was incorporated in 1995 and is headquartered in Reston, Virginia.

How the Company Makes Money

Verisign primarily generates revenue through the registration and renewal of domain names, particularly for the '.com' and '.net' top-level domains (TLDs). The company charges annual fees to registrars for every domain name registered or renewed, which constitutes a significant portion of its revenue. Additionally, Verisign offers DNS services and security solutions, including Distributed Denial of Service (DDoS) protection, which further contribute to its earnings. The company has established long-term contracts and partnerships with various domain registrars and resellers, ensuring a steady flow of income from domain registrations. Factors such as the growth in internet usage, increasing demand for online presence, and the trend towards cybersecurity investments also play a pivotal role in driving Verisign's revenue growth.

Verisign Financial Statement Overview

Summary

Strong profitability and cash generation support the score (very high margins and growing free cash flow), but this is meaningfully offset by a weak balance-sheet profile with persistently negative equity, which reduces financial flexibility despite stable debt levels.

Income Statement

Revenue shows steady growth across the period (generally low-to-mid single digits annually, with 2025 accelerating to ~6% vs. 2024). Profitability is a major strength: gross margin is consistently very high (~86–88%), with strong operating profitability (EBIT margin ~65–70%) and healthy net margins (~47–64%). The main weakness is that growth is not high for a software business, and net income dipped in 2022 and again in 2024 before improving in 2025, indicating some earnings volatility despite strong margins.

Balance Sheet

The balance sheet is the key concern: stockholders’ equity is negative in every year shown (and worsened again by 2025), which reduces financial flexibility and makes leverage metrics less meaningful (debt-to-equity is negative due to negative equity). Total debt is fairly stable around ~$1.8B, which is manageable relative to earnings power, but negative equity and shrinking total assets by 2025 heighten balance-sheet risk and limit downside protection in a stress scenario.

Cash Flow

Cash generation is consistently strong. Operating cash flow rises from ~$730M (2020) to ~$1.09B (2025), and free cash flow is high and improving (to ~$1.07B in 2025, with ~6% growth). Free cash flow is also consistently close to net income (roughly mid-90%+ in 2020–2024), supporting earnings quality. A modest weakness is variability in year-to-year free cash flow growth (including a decline in 2020), but the overall trajectory is positive.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.63B	1.66B	1.56B	1.49B	1.42B	1.33B
Gross Profit	1.43B	1.46B	1.37B	1.30B	1.22B	1.14B
EBITDA	1.16B	1.12B	1.13B	1.10B	1.00B	913.41M
Net Income	811.00M	825.70M	785.70M	817.60M	673.80M	784.80M
Balance Sheet
Total Assets	1.40B	673.40M	1.41B	1.75B	1.73B	1.98B
Cash, Cash Equivalents and Short-Term Investments	617.70M	580.50M	599.90M	926.40M	980.40M	1.21B
Total Debt	1.79B	1.79B	1.80B	1.80B	1.79B	1.79B
Total Liabilities	3.45B	2.15B	3.36B	3.33B	3.30B	3.24B
Stockholders Equity	-2.05B	-1.47B	-1.96B	-1.58B	-1.56B	-1.26B
Cash Flow
Free Cash Flow	1.01B	1.07B	874.50M	808.00M	803.70M	754.12M
Operating Cash Flow	1.03B	1.09B	902.60M	853.80M	831.10M	807.15M
Investing Cash Flow	-20.10M	109.10M	286.30M	-97.40M	355.70M	-269.25M
Financing Cash Flow	-1.05B	-1.10B	-1.22B	-889.80M	-1.04B	-719.13M

Verisign Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 242.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRSN, the sentiment is Negative. The current price of 242.62 is below the 20-day moving average (MA) of 248.17, below the 50-day MA of 247.01, and below the 200-day MA of 265.23, indicating a bearish trend. The MACD of -0.71 indicates Positive momentum. The RSI at 44.16 is Neutral, neither overbought nor oversold. The STOCH value of 10.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VRSN.

Verisign Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHKP	77 Outperform	$18.95B	19.32	34.19%	―	6.31%	25.27%
FTNT	72 Outperform	$60.32B	32.50	228.04%	―	14.78%	22.52%
VRSN	67 Neutral	$22.34B	28.07	―	0.94%	5.47%	-0.03%
ZS	62 Neutral	$29.63B	-645.54	-2.41%	―	23.24%	-8.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GDDY	60 Neutral	$12.93B	16.57	369.45%	―	8.79%	-55.15%
SAIL	42 Neutral	$8.39B	-12.61	-10.58%	―	23.38%	-30.16%