Verisign (VRSN) AI Stock Analysis

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Verisign

(NASDAQ:VRSN)

Rating:72Outperform

Price Target:―

Verisign's stock is supported by strong revenue growth and profitability, but high leverage and negative equity pose risks. Technical indicators show bullish momentum, although the stock appears overvalued with a high P/E ratio and no dividend yield. Positive earnings call insights are tempered by macroeconomic uncertainties and legal issues.

Positive Factors

Earnings

Positive estimate revisions and an increase in target multiples raise the target price to $288.

Stock Performance

Verisign is viewed as the most defensive stock within the coverage with little direct tariff exposure.

Negative Factors

Domain Growth

Ongoing challenges around .com domain name growth.

Risks

Risks include slowing pace of domain name growth, new gTLDs gaining more traction vs .com, any potential for loss of .com or .net contracts, security breach.

Verisign (VRSN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$26.76B

Dividend Yield0.27%

Average Volume (3M)900.89K

Price to Earnings (P/E)34.8

Beta (1Y)0.46

Revenue Growth4.12%

EPS Growth0.54%

CountryUS

Employees929

SectorTechnology

Sector Strength83

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)2.10

Shares Outstanding93,900,000

10 Day Avg. Volume764,636

30 Day Avg. Volume900,893

Financial Highlights & Ratios

PEG Ratio14.98

Price to Book (P/B)-18.95

Price to Sales (P/S)0.00

P/FCF Ratio29.15

Enterprise Value/Market Cap1.03

Enterprise Value/Revenue4.46

Enterprise Value/Gross Profit19.98

Enterprise Value/Ebitda6.09

Forecast

1Y Price Target

$286.50

Price Target Upside0.52% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Verisign Business Overview & Revenue Model

Company DescriptionVeriSign, 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 MoneyVerisign generates revenue primarily through the registration of domain names, charging registrars annual fees for each registered domain name under the .com and .net TLDs. The company operates under agreements with the Internet Corporation for Assigned Names and Numbers (ICANN), which allows it to set prices within certain limits for these TLDs. Additionally, Verisign offers security services, including Distributed Denial of Service (DDoS) protection and managed DNS, although these services constitute a smaller portion of its revenue. The company's financial performance is closely tied to the growth in domain name registrations and renewals, which are influenced by overall internet expansion, digital transformation trends, and the global proliferation of online services.

Verisign Key Performance Indicators (KPIs)

Any

Domain Name Registrations

Domain Name Registrations
Measures the total number of domain names registered, reflecting the company's market share in the domain registry industry and its ability to attract and retain customers.

Chart InsightsVerisign's domain name registrations have been declining since mid-2022, with a notable drop in 2024, driven by decreases in the US and China. Despite this, the company is optimistic about reversing the trend with new marketing strategies and improved registrar engagement, as evidenced by an uptick in new registrations in the last quarter of 2024. This strategic focus could stabilize the domain base, even as the company faces challenges in key markets like China, which now has a diminished impact on overall volumes.

Data provided by:

Main Street Data

Verisign Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 13.15%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call highlights positive trends in domain name registrations, improved financial performance, and the introduction of a quarterly dividend, indicating stability and growth. However, these are tempered by uncertainties in the macroeconomic environment, increased operating expenses, and ongoing legal disputes over the .web domain.

Q1-2025 Updates

Positive Updates

Increase in Domain Name Base

The domain name base for .com and .net increased by 777,000 from year-end 2024, totaling 169.8 million domain names. New registrations for the first quarter totaled 10.1 million, up from 9.5 million both last quarter and the same quarter last year.

Improved Renewal Rates

The renewal rate for the first quarter of 2025 is expected to be 75.3%, an increase from 74.1% a year ago.

Positive Financial Performance

VeriSign, Inc. generated revenue of $402 million, up 4.7% from the same quarter a year ago. Net income for the first quarter totaled $199 million, up from $191 million last quarter and $194 million a year ago.

Introduction of Quarterly Cash Dividend

VeriSign, Inc. declared a cash dividend of 77¢ per share, with plans to continue and grow the dividend annually.

Stable Financial Position

The company maintained a strong financial position with $649 million in cash, cash equivalents, and marketable securities at the end of the quarter.

Negative Updates

Uncertain Macroeconomic Environment

Guidance reflects caution due to an unclear macroeconomic outlook, affecting the confidence in predicting the domain name base growth.

Increased Operating Expenses

Operating expenses increased from $125 million for the first quarter a year ago to $131 million in Q1 2025, mainly due to a slight increase in headcount and incentive-based compensation.

Pending .web Domain Dispute

Continued legal disputes over the .web domain, with a final hearing anticipated in November, delaying its introduction to the market.

Company Guidance

In the first quarter of 2025, VeriSign, Inc. reported significant business developments and financial metrics. The domain name base for .com and .net reached 169.8 million, growing by 777,000 from the end of 2024, with new registrations totaling 10.1 million. Renewal rates improved to 75.3%, up from 74.1% a year prior. Financially, revenue increased by 4.7% year-over-year to $402 million, while operating expenses slightly rose to $131 million. Net income was $199 million, resulting in diluted earnings per share of $2.10. The company repurchased 1 million shares, returning $230 million to shareholders, and introduced a quarterly cash dividend of 77 cents per share. Updated full-year 2025 guidance expects revenue between $1.635 billion and $1.650 billion, operating income between $1.110 billion and $1.125 billion, and capital expenditures between $30 million and $40 million. VeriSign holds $649 million in cash and marketable securities, and the board authorized a $793 million share repurchase program with no expiration.

Verisign Financial Statement Overview

Summary

Verisign demonstrates strong revenue growth and profitability, with robust income statement metrics. However, the balance sheet reveals significant leverage and negative equity, posing financial risks. Solid cash flow management and consistent free cash flow generation offer some stability amidst these concerns.

Income Statement

Very Positive

Verisign has demonstrated strong revenue growth over the years, with the latest TTM showing a slight increase in total revenue compared to previous years. The company maintains high gross and EBIT margins, indicating efficient cost management and operational effectiveness. Net profit margin remains robust, although slightly impacted by marginal fluctuations in net income.

Balance Sheet

Negative

The balance sheet reveals a negative stockholders' equity, which is concerning. The high debt-to-equity ratio is indicative of significant leverage, posing potential financial risk. Despite these challenges, the company has managed its liabilities consistently, but the negative equity position remains a critical issue.

Cash Flow

Positive

Verisign's cash flow statement shows strong operational cash flows, with consistent free cash flow generation. The operating cash flow to net income ratio indicates effective cash conversion. However, the fluctuations in investing and financing cash flows highlight some volatility in financial activities.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.58B	1.56B	1.49B	1.42B	1.33B	1.27B
	Gross Profit
1.38B	1.37B	1.30B	1.22B	1.14B	1.08B
	EBIT
1.07B	1.06B	1.00B	943.10M	866.80M	824.20M
	EBITDA
1.14B	1.13B	1.10B	1.00B	913.41M	886.74M
	Net Income Common Stockholders
790.90M	785.70M	817.60M	673.80M	784.80M	814.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
924.70M	599.90M	926.40M	980.40M	1.21B	1.17B
	Total Assets
1.73B	1.41B	1.75B	1.73B	1.98B	1.77B
	Total Debt
1.80B	1.80B	1.80B	1.79B	1.79B	1.79B
	Net Debt
1.06B	1.59B	1.56B	1.41B	1.56B	1.39B
	Total Liabilities
3.36B	3.36B	3.33B	3.30B	3.24B	3.16B
	Stockholders Equity
-1.64B	-1.09B	-1.58B	-1.56B	-1.26B	-1.39B
Cash Flow		Free Cash Flow
906.50M	874.50M	808.00M	803.70M	754.12M	686.79M
	Operating Cash Flow
936.60M	902.60M	853.80M	831.10M	807.15M	730.18M
	Investing Cash Flow
107.50M	286.30M	-97.40M	355.70M	-269.25M	-72.26M
	Financing Cash Flow
-1.20B	-1.22B	-889.80M	-1.04B	-719.13M	-764.88M

Verisign Technical Analysis

Technical Analysis Sentiment

Positive

Last Price285.02

Price Trends

50DMA

265.89

Positive

100DMA

246.77

Positive

200DMA

217.17

Positive

Market Momentum

MACD

2.69

Positive

RSI

64.42

Neutral

STOCH

73.98

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRSN, the sentiment is Positive. The current price of 285.02 is above the 20-day moving average (MA) of 277.41, above the 50-day MA of 265.89, and above the 200-day MA of 217.17, indicating a bullish trend. The MACD of 2.69 indicates Positive momentum. The RSI at 64.42 is Neutral, neither overbought nor oversold. The STOCH value of 73.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VRSN.

Verisign Risk Analysis

Verisign disclosed 22 risk factors in its most recent earnings report. Verisign reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

Challenging global economic conditions have in the past and may in the future negatively impact our business. Q4, 2024

Verisign Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHKP	82 Outperform	$25.30B	30.83	30.92%	―	6.40%	6.49%
GEN	75 Outperform	$18.19B	28.46	28.80%	1.70%	3.23%	7.79%
ZS	74 Outperform	$47.18B	―	-2.68%	―	25.46%	49.20%
CYBR	73 Outperform	$20.31B	1,777.39	-5.36%	―	35.12%	-191.84%
VRSN	72 Outperform	$26.76B	34.84	-72.04%	0.27%	4.12%	0.54%
AKAM	71 Outperform	$11.26B	25.98	9.82%	―	3.51%	-27.28%
Sector *	62 Neutral	$11.81B	10.34	-7.44%	2.91%	7.41%	-7.93%

* Technology Sector Average

Performance Comparison

VRSN

Verisign

285.02

105.38

58.66%

AKAM

Akamai

77.03

-13.31

-14.73%

CHKP

Check Point

233.47

77.36

49.55%

GEN

Gen Digital

29.33

5.29

22.00%

CYBR

CyberArk Software

403.76

151.30

59.93%

Zscaler

303.03

119.12

64.77%

Verisign Corporate Events

Executive/Board ChangesShareholder Meetings

Verisign Stockholders Approve Key Amendments at Annual Meeting

Neutral

May 22, 2025

At the annual meeting on May 22, 2025, Verisign stockholders approved an amendment to the company’s Restated Certificate of Incorporation, limiting the liability of certain officers under Delaware law. Additionally, stockholders elected directors, approved executive compensation, ratified KPMG LLP as the independent auditor, and voted against a proposal for stockholder action by written consent.

The most recent analyst rating on (VRSN) stock is a Buy with a $250.00 price target. To see the full list of analyst forecasts on Verisign stock, see the VRSN Stock Forecast page.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.