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Verisign (VRSN)
:VRSN

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
Domain Growth
.com domains grew 0.2% year-over-year, marking the first month of year-over-year growth tracked in at least 15 months.
Financial Performance
Positive estimate revisions and an increase in target multiples raise the target price to $288.
Market Position
Verisign is viewed as the most defensive stock within the coverage with little direct tariff exposure.
Negative Factors
Domain Trends
.net domain names have declined month-over-month for six straight months.

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

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
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: 13.66%|
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
85
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
40
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
75
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.58B1.56B1.49B1.42B1.33B1.27B
Gross Profit1.38B1.37B1.30B1.22B1.14B1.08B
EBITDA1.14B1.13B1.10B1.00B913.41M886.74M
Net Income790.90M785.70M817.60M673.80M784.80M814.89M
Balance Sheet
Total Assets1.45B1.41B1.75B1.73B1.98B1.77B
Cash, Cash Equivalents and Short-Term Investments648.50M599.90M926.40M980.40M1.21B1.17B
Total Debt1.79B1.80B1.80B1.79B1.79B1.79B
Total Liabilities3.42B3.36B3.33B3.30B3.24B3.16B
Stockholders Equity-1.40B-1.09B-1.58B-1.56B-1.26B-1.39B
Cash Flow
Free Cash Flow906.50M874.50M808.00M803.70M754.12M686.79M
Operating Cash Flow936.60M902.60M853.80M831.10M807.15M730.18M
Investing Cash Flow107.50M286.30M-97.40M355.70M-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 Price286.32
Price Trends
50DMA
279.02
Positive
100DMA
259.42
Positive
200DMA
226.33
Positive
Market Momentum
MACD
2.88
Positive
RSI
57.13
Neutral
STOCH
65.45
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 286.32 is above the 20-day moving average (MA) of 282.86, above the 50-day MA of 279.02, and above the 200-day MA of 226.33, indicating a bullish trend. The MACD of 2.88 indicates Positive momentum. The RSI at 57.13 is Neutral, neither overbought nor oversold. The STOCH value of 65.45 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 0 New Risks

Verisign Peers Comparison

Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$24.23B29.5330.92%6.40%6.49%
76
Outperform
$11.62B26.809.82%3.51%-27.28%
GEGEN
75
Outperform
$18.91B29.5928.80%1.68%3.23%7.79%
73
Outperform
$19.51B1,777.39-5.36%35.12%-191.84%
72
Outperform
$26.89B35.00-72.04%1.09%4.12%0.54%
ZSZS
72
Outperform
$48.16B-2.68%25.46%49.20%
49
Neutral
C$2.96B2.13-80.92%2.67%12.55%-24.47%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VRSN
Verisign
286.32
110.00
62.39%
AKAM
Akamai
79.48
-10.99
-12.15%
CHKP
Check Point
223.63
54.18
31.97%
GEN
Gen Digital
30.49
6.29
25.99%
CYBR
CyberArk Software
398.76
124.44
45.36%
ZS
Zscaler
314.77
113.12
56.10%

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
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: Apr 27, 2025