Verisign (VRSN) AI Stock Analysis

Compare

1,409 Followers

Top Page

Verisign

(NASDAQ:VRSN)

Select Model

Neutral 62 (OpenAI - 4o)

Rating:62Neutral

Price Target:

$262.00

▲(5.13% Upside)

Verisign's overall stock score is driven by strong earnings call results and solid financial performance, particularly in profitability and cash flow. However, technical analysis indicates bearish momentum, and valuation metrics suggest the stock may be overvalued. The balance sheet's weaknesses and high leverage are significant risks, impacting the overall score.

Positive Factors

Revenue Growth

Verisign's consistent revenue growth reflects its strong market position in domain registration, ensuring stable cash flow and financial health.

Domain Name Base Expansion

The expansion of the domain name base indicates sustained demand for Verisign's core services, supporting long-term revenue stability.

Cash Flow Generation

Strong cash flow generation enhances Verisign's ability to invest in growth opportunities and return capital to shareholders, bolstering financial resilience.

Negative Factors

High Leverage

High leverage and negative equity pose financial risks, potentially limiting Verisign's ability to invest in growth or weather economic downturns.

Increased Operating Expenses

Rising operating expenses can pressure margins and reduce profitability, impacting Verisign's ability to maintain its competitive edge.

Slower Growth in Asia Pacific

Slower growth in the Asia Pacific region may hinder Verisign's global expansion efforts, affecting long-term revenue diversification.

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

Market Cap

$23.11B

Dividend Yield0.94%

Average Volume (3M)608.11K

Price to Earnings (P/E)29.0

Beta (1Y)0.49

Revenue Growth5.47%

EPS Growth-0.03%

CountryUS

Employees929

SectorTechnology

Sector Strength88

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)2.27

Shares Outstanding92,700,000

10 Day Avg. Volume514,920

30 Day Avg. Volume608,108

Financial Highlights & Ratios

PEG Ratio20.44

Price to Book (P/B)-10.37

Price to Sales (P/S)13.04

P/FCF Ratio23.22

Enterprise Value/Market Cap1.18

Enterprise Value/Revenue16.81

Enterprise Value/Gross Profit19.11

Enterprise Value/Ebitda23.66

Forecast

1Y Price Target

$311.00

Price Target Upside24.79% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

EPS Forecast (FY)9.63

Revenue Forecast (FY)$1.71B

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

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.

Chart InsightsVerisign's revenue growth is robust across most regions, with the United States and EMEA showing consistent upward trends. However, China presents volatility, with recent declines followed by a sharp increase in late 2024. The earnings call highlights strong domain name growth and improved renewal rates, contributing to overall revenue increases. Despite economic uncertainties, particularly in China, Verisign remains optimistic about future growth, supported by strategic engagements with their registrar channel and a positive financial outlook for 2025.

Data provided by:

The Fly

Verisign Earnings Call Summary

Earnings Call Date:Oct 23, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Feb 05, 2026

Earnings Call Sentiment Positive

The earnings call highlighted a strong financial performance with increased revenue, EPS, and domain name base, alongside improved renewal rates and shareholder returns. Despite some challenges with increased operating expenses and slower growth in the Asia Pacific region, the company remains optimistic about the positive impact of AI on its business. Overall, the highlights significantly outweigh the lowlights, indicating a positive outlook.

Q3-2025 Updates

Positive Updates

Increase in Domain Name Base

The domain name base for .com and .net totaled 171.9 million domain names, up 1.4% year-over-year, with 10.6 million new registrations.

Revenue and EPS Growth

Revenue increased by 7.3% year-over-year to $419 million, and EPS grew by 9.7% year-over-year.

Strong Shareholder Returns

Returned $72 million through dividends and $215 million through share repurchases, totaling $287 million returned to shareholders.

Improved Renewal Rates

The renewal rate for the third quarter of 2025 is expected to be 75.3%, up from 72.2% a year ago.

Positive Cash Flow and Liquidity Position

Operating cash flow was $308 million and free cash flow was $303 million. Cash, cash equivalents, and marketable securities totaled $618 million.

AI as a Growth Driver

AI is positively impacting domain name registrations and DNS resolution services, with infrastructure processing over 450 billion DNS transactions per day.

Negative Updates

Increased Operating Expenses

Operating expenses increased to $135 million, up from $129 million last quarter and $121 million a year ago, due to incentive compensation and legal costs.

Slower Growth in Asia Pacific Region

While domain base in Asia Pacific grew, it wasn't as strong as the growth seen during the first half of 2025.

Company Guidance

During VeriSign's Third Quarter 2025 Earnings Call, the company provided updated financial guidance and highlighted several key metrics. VeriSign reported a 7.3% year-over-year increase in revenue, reaching $419 million, and a 9.7% increase in EPS. The domain name base for .com and .net grew to 171.9 million, a 1.4% increase year-over-year, with 10.6 million new registrations in the quarter. The expected renewal rate for the third quarter of 2025 is 75.3%, up from 72.2% the previous year. The company returned $287 million to shareholders through dividends and share repurchases. For the full year 2025, VeriSign expects revenue between $1.652 billion and $1.657 billion, and operating income between $1.119 billion and $1.124 billion. Capital expenditures are projected to be between $25 million and $35 million, with a GAAP effective tax rate of 21% to 24%. The company noted a stable financial position with $618 million in cash, cash equivalents, and marketable securities at the end of the quarter.

Verisign Financial Statement Overview

Summary

Verisign exhibits strong profitability and cash flow generation, which are key strengths. However, the negative equity and high leverage pose significant financial risks. The company maintains stable revenue growth, but the balance sheet's weaknesses could impact long-term sustainability.

Income Statement

Very Positive

Verisign demonstrates strong profitability with a high gross profit margin of 87.97% and a solid net profit margin of 49.86% for TTM. Revenue growth is modest at 1.78%, indicating stable but slow expansion. EBIT and EBITDA margins are robust, reflecting efficient operations.

Balance Sheet

Negative

The balance sheet reveals a negative stockholders' equity, leading to a concerning debt-to-equity ratio of -1.25. This indicates high leverage and potential financial risk. The negative return on equity suggests inefficiencies in generating returns from shareholders' investments.

Cash Flow

Positive

Cash flow analysis shows a healthy free cash flow growth of 5.81% and a strong free cash flow to net income ratio of 97.31%, indicating effective cash generation relative to earnings. The operating cash flow to net income ratio is solid, supporting operational stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.63B	1.56B	1.49B	1.42B	1.33B	1.27B
Gross Profit	1.43B	1.37B	1.30B	1.22B	1.14B	1.08B
EBITDA	1.16B	1.13B	1.10B	1.00B	913.41M	886.74M
Net Income	811.00M	785.70M	817.60M	673.80M	784.80M	814.89M
Balance Sheet
Total Assets	1.40B	1.41B	1.75B	1.73B	1.98B	1.77B
Cash, Cash Equivalents and Short-Term Investments	617.70M	599.90M	926.40M	980.40M	1.21B	1.17B
Total Debt	1.79B	1.80B	1.80B	1.79B	1.79B	1.80B
Total Liabilities	3.45B	3.36B	3.33B	3.30B	3.24B	3.16B
Stockholders Equity	-2.05B	-1.96B	-1.58B	-1.56B	-1.26B	-1.39B
Cash Flow
Free Cash Flow	1.01B	874.50M	808.00M	803.70M	754.12M	686.79M
Operating Cash Flow	1.03B	902.60M	853.80M	831.10M	807.15M	730.18M
Investing Cash Flow	-20.10M	286.30M	-97.40M	355.70M	-269.25M	-72.26M
Financing Cash Flow	-1.05B	-1.22B	-889.80M	-1.04B	-719.13M	-764.88M

Verisign Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price249.22

Price Trends

50DMA

246.64

Positive

100DMA

257.92

Negative

200DMA

264.92

Negative

Market Momentum

MACD

0.35

Negative

RSI

55.33

Neutral

STOCH

80.91

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 249.22 is above the 20-day moving average (MA) of 245.41, above the 50-day MA of 246.64, and below the 200-day MA of 264.92, indicating a neutral trend. The MACD of 0.35 indicates Negative momentum. The RSI at 55.33 is Neutral, neither overbought nor oversold. The STOCH value of 80.91 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 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 0 New Risks

Verisign Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHKP	77 Outperform	$20.20B	20.67	34.19%	―	6.31%	25.27%
FTNT	71 Outperform	$56.81B	31.42	228.04%	―	14.78%	22.52%
VRSN	62 Neutral	$23.11B	29.05	―	0.94%	5.47%	-0.03%
ZS	62 Neutral	$34.17B	-802.52	-2.41%	―	23.24%	-8.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GDDY	60 Neutral	$14.61B	18.50	369.45%	―	8.79%	-55.15%
SAIL	39 Underperform	$10.82B	-16.70	-10.58%	―	23.38%	-30.16%

* Technology Sector Average

Performance Comparison

VRSN

Verisign

249.22

41.31

19.87%

CHKP

Check Point

188.54

0.67

0.36%

FTNT

Fortinet

76.32

-17.91

-19.01%

GDDY

GoDaddy

107.35

-93.56

-46.57%

Zscaler

210.58

23.00

12.26%

SAIL

SailPoint, Inc.

18.90

-5.65

-23.01%

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.Date of analysis: Oct 26, 2025