Education
About Us
Working with TipRanks
Follow Us
Verisign (VRSN)
NASDAQ:VRSN
Top Page
Verisign
(NASDAQ:VRSN)
Select Model
Select Model
Rating:70Outperform
Price Target:
$247.00
▲(4.92% Upside)
Action:UpgradedDate:02/07/26
The score is driven primarily by strong profitability and consistently robust free cash flow, supported by constructive 2026 guidance and positive operating momentum from the latest earnings call. Offsetting factors are the weak technical setup (below key moving averages with bearish MACD) and balance-sheet risk from persistently negative equity, with valuation looking moderate-to-full at a 27.6 P/E.
Positive Factors
Essential internet infrastructure
Verisign operates mission-critical TLD and DNS infrastructure with a long track record of uninterrupted service. This entrenched position creates high switching costs, steady registrar demand, and durable recurring revenue, supporting long-term stability and predictable cash flow.
Strong and consistent free cash flow
Consistently high FCF, which tracked near net income, underpins capital returns and self-funding of operations. Reliable cash generation funds buybacks/dividends and capex, reduces refinancing needs, and gives management flexibility to invest in capacity or return capital despite modest organic growth.
Very high and sustainable margins
Exceptionally high gross and operating margins reflect a scalable registry model with low incremental costs per domain. Persistent operating leverage supports profitability and cash flow even with low-to-mid single-digit growth, enabling durable returns on incremental revenues.
Negative Factors
Negative shareholders' equity
Persistent negative equity weakens the balance sheet and reduces financial flexibility. It makes leverage metrics less meaningful, limits downside protection in stress scenarios, and could constrain strategic options or increase scrutiny from creditors and rating agencies over time.
Modest growth outlook
Revenue expansion is structurally modest, driven mainly by domain count and occasional price actions. Limited organic growth constrains revenue upside, placing greater reliance on margin maintenance and capital returns to drive shareholder value over the medium term.
Registrar-channel execution risk
Verisign depends on a broad registrar ecosystem to drive registrations and renewals. Consolidation and shifting registrar business models create structural timing and execution risk for domain sales and retention, making near-term volume and renewal trends harder to predict.
Verisign (VRSN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.59B
Dividend Yield0.94%
Average Volume (3M)855.90K
Price to Earnings (P/E)26.7
Beta (1Y)0.50
Revenue Growth5.47%
EPS Growth-0.03%
CountryUS
Employees929
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)2.23
Shares Outstanding91,700,000
10 Day Avg. Volume795,972
30 Day Avg. Volume855,903
Financial Highlights & Ratios
PEG Ratio2.66
Price to Book (P/B)-10.42
Price to Sales (P/S)13.55
P/FCF Ratio21.01
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue14.27
Enterprise Value/Gross Profit16.19
Enterprise Value/Ebitda20.18
Forecast
1Y Price Target
$276.00Price Target Upside17.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)9.52
Revenue Forecast (FY)$1.73B
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 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 Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyVerisign Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call conveyed solid operating and financial momentum: above-trend revenue (+6.4%) and EPS (+10.1%) growth, strong new registrations and domain base expansion, robust cash generation and meaningful shareholder returns. Management provided constructive 2026 guidance while highlighting opportunities from AI-driven demand. Headwinds include a one-time Q4 impairment that raised operating expenses, modest sequential EPS decline, higher foreign taxes, lower expected interest income, and elevated capex driven by equipment replacement and AI-induced industry constraints. Overall, positives (growth, cash, domain metrics, return of capital) materially outweigh the transitory and manageable negatives.Q4-2025 Updates
Positive Updates
Sustained Service Reliability
Maintained 100% service delivery for .com and NetDNS for the 28th consecutive year, supporting increased utilization of VeriSign's infrastructure.
Strong Full-Year Revenue and EPS Growth
Full-year 2025 revenue of $1,660,000,000, up 6.4% year-over-year; operating income $1,120,000,000, up 5.9%; full-year diluted EPS $8.81, up 10.1%.
Large Increase in New Registrations
2025 new registrations totaled 41,700,000 (largest since 2021). Q4 new registrations were 10,700,000 versus 9,500,000 in Q4 2024, an increase of ~12.6%.
Domain Base Expansion
Domain base grew by 4,500,000 names (+2.6%) during 2025 to end at 173,500,000 .com/.net names; Q4 net registrations added 1,580,000.
Improving Renewal Rates
Preliminary Q4 renewal rate of 75% compared to 74% a year ago (1 percentage-point improvement).
Strong Cash Generation and Capital Return
Full-year free cash flow of $1,070,000,000; returned $1,100,000,000 to shareholders in 2025 via share repurchases and initiated quarterly dividends. Cash, cash equivalents and marketable securities of $581,000,000 and $1,080,000,000 remaining under share repurchase authorization.
Dividend Initiation and Increase
Board declared a quarterly cash dividend of $0.81 per share payable 02/27/2026, a 5.2% increase consistent with net income growth.
Encouraging 2026 Guidance
2026 guidance: revenue $1,715M–$1,735M; operating income $1,160M–$1,180M; domain name-based growth guidance of 1.5%–3.5%—management cites continued momentum exiting 2025.
Negative Updates
Quarterly Operating Expense Increase Due to Impairment
Q4 2025 operating expenses rose to $140,000,000 from $135,000,000 last quarter and $132,000,000 in 2024, driven largely by an impairment charge on real estate intended for sale.
Sequential Decline in Q4 Net Income and EPS
Q4 net income $206,000,000 vs. $213,000,000 last quarter; Q4 diluted EPS $2.23 vs. $2.27 last quarter (though still up versus Q4 2024).
Higher Income Tax Expense in Q4
Q4 recorded a higher income tax expense primarily due to increased foreign-based taxes; GAAP effective tax rate for 2026 expected to rise to 22%–25%.
Lower Interest Income Expectations / Higher Net Interest Expense
Management expects interest expense and non-operating income net to be an expense of $57M–$67M in 2026 due to lower short-term rates and lower cash balances—a headwind to net income.
Elevated 2026 Capital Expenditures
Capex expected to rise to $55M–$65M (above typical range) due to end-of-life equipment replacements, planned capacity expansion and higher costs from AI-driven demand and supply constraints.
Dependence on Diverse Registrar Channel Creates Uncertainty
Registrar channel remains diverse with M&A and changing business models; while marketing programs improved engagement, channel variability introduces execution and timing risk for domain sales and renewals.
Company Guidance
VeriSign guided 2026 domain‑name‑based growth of 1.5%–3.5%, revenue of $1,715,000,000–$1,735,000,000, and operating income of $1,160,000,000–$1,180,000,000 (the midpoint implying an operating margin more in line with long‑term trends), with interest expense and non‑operating income, net, expected to be an expense of $57,000,000–$67,000,000, capital expenditures of $55,000,000–$65,000,000 (higher than typical due to end‑of‑life equipment replacement, capacity expansion and HQ projects amid AI‑driven cost pressures), and a GAAP effective tax rate of 22%–25%; management also noted the first possible .com price increase could be executable in October 2026 with notice in April. For context, FY2025 results were revenue $1,660,000,000, operating income $1,120,000,000, EPS $8.81, full‑year free cash flow $1,070,000,000, cash and equivalents $581,000,000, $1,080,000,000 available under the buyback program, and a newly declared quarterly dividend of $0.81 per share (up 5.2%).Verisign Financial Statement Overview
Summary
Profitability and cash generation are major strengths (very high gross/EBIT margins and strong, rising free cash flow). The key offset is balance-sheet risk from persistently negative equity and shrinking total assets by 2025, which reduces financial flexibility despite stable debt.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.86
Very Positive
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.38
Negative
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.84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.66B | 1.56B | 1.49B | 1.42B | 1.33B |
| Gross Profit | 1.46B | 1.37B | 1.30B | 1.22B | 1.14B |
| EBITDA | 1.17B | 1.13B | 1.10B | 1.00B | 913.41M |
| Net Income | 955.50M | 785.70M | 817.60M | 673.80M | 784.80M |
Balance Sheet | |||||
| Total Assets | 1.33B | 1.41B | 1.75B | 1.73B | 1.98B |
| Cash, Cash Equivalents and Short-Term Investments | 580.50M | 599.90M | 926.40M | 980.40M | 1.21B |
| Total Debt | 1.80B | 1.80B | 1.80B | 1.79B | 1.79B |
| Total Liabilities | 3.48B | 3.36B | 3.33B | 3.30B | 3.24B |
| Stockholders Equity | -2.15B | -1.96B | -1.58B | -1.56B | -1.26B |
Cash Flow | |||||
| Free Cash Flow | 1.07B | 874.50M | 808.00M | 803.70M | 754.12M |
| Operating Cash Flow | 1.09B | 902.60M | 853.80M | 831.10M | 807.15M |
| Investing Cash Flow | 109.10M | 286.30M | -97.40M | 355.70M | -269.25M |
| Financing Cash Flow | -1.10B | -1.22B | -889.80M | -1.04B | -719.13M |
Verisign Technical Analysis
Neutral
235.42
Price Trends
237.59
Negative
243.64
Negative
260.74
Negative
Market Momentum
-3.77
Negative
57.64
Neutral
94.42
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRSN, the sentiment is Neutral. The current price of 235.42 is above the 20-day moving average (MA) of 223.38, below the 50-day MA of 237.59, and below the 200-day MA of 260.74, indicating a neutral trend. The MACD of -3.77 indicates Negative momentum. The RSI at 57.64 is Neutral, neither overbought nor oversold. The STOCH value of 94.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VRSN.
Verisign Risk Analysis
Verisign disclosed 25 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 0 New Risks
Verisign Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $60.01B | 33.42 | 135.72% | ― | 14.78% | 22.52% | |
70 Outperform | $21.59B | 26.74 | ― | 0.94% | 5.47% | -0.03% | |
69 Neutral | $17.14B | 16.57 | 37.27% | ― | 6.31% | 25.27% | |
66 Neutral | $24.87B | -362.14 | -3.56% | ― | 23.24% | -8.83% | |
66 Neutral | $11.90B | 14.30 | 192.90% | ― | 8.79% | -55.15% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
41 Neutral | $7.98B | -12.55 | -10.58% | ― | 23.38% | -30.16% |
* Technology Sector Average
VRSN
Verisign
235.42
-3.43
-1.43%
CHKP
Check Point
159.70
-61.90
-27.93%
FTNT
Fortinet
81.10
-25.70
-24.06%
GDDY
GoDaddy
89.23
-87.07
-49.39%
ZS
Zscaler
154.67
-41.78
-21.27%
SAIL
SailPoint, Inc.
14.20
-9.21
-39.34%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.