VERISIGN INC (VRSN) Stock Fundamental Analysis
USA - NASDAQ:VRSN - US92343E1029 - Common Stock
235.6 USD
+2.78 (+1.19%)
233.5 USD
-2.1 (-0.89%)
VRSN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 85 industry peers in the IT Services industry. VRSN has an excellent profitability rating, but there are concerns on its financial health. VRSN is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year VRSN was profitable.
In the past year VRSN had a positive cash flow from operations.
Each year in the past 5 years VRSN has been profitable.
Each year in the past 5 years VRSN had a positive operating cash flow.
1.2 Ratios
VRSN's Return On Assets of 57.78% is amongst the best of the industry. VRSN outperforms 100.00% of its industry peers.
With an excellent Return On Invested Capital value of 914.47%, VRSN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 57.78% | ||
| ROE | N/A | ||
| ROIC | 914.47% |
ROA(3y)47.16%
ROA(5y)45.43%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With an excellent Profit Margin value of 49.86%, VRSN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
VRSN's Profit Margin has been stable in the last couple of years.
VRSN has a better Operating Margin (67.62%) than 100.00% of its industry peers.
VRSN's Operating Margin has been stable in the last couple of years.
VRSN has a better Gross Margin (87.97%) than 98.82% of its industry peers.
VRSN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 67.62% | ||
| PM (TTM) | 49.86% | ||
| GM | 87.97% |
OM growth 3Y1.34%
OM growth 5Y0.75%
PM growth 3Y-5.15%
PM growth 5Y0.3%
GM growth 3Y0.84%
GM growth 5Y0.55%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so VRSN is creating value.
The number of shares outstanding for VRSN has been reduced compared to 1 year ago.
The number of shares outstanding for VRSN has been reduced compared to 5 years ago.
The debt/assets ratio for VRSN is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of -4.96, we must say that VRSN is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of -4.96, VRSN is not doing good in the industry: 87.06% of the companies in the same industry are doing better.
The Debt to FCF ratio of VRSN is 1.78, which is an excellent value as it means it would take VRSN, only 1.78 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.78, VRSN is in the better half of the industry, outperforming 72.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.78 | ||
| Altman-Z | -4.96 |
ROIC/WACC101.05
WACC9.05%
2.3 Liquidity
A Current Ratio of 0.53 indicates that VRSN may have some problems paying its short term obligations.
With a Current ratio value of 0.53, VRSN is not doing good in the industry: 91.76% of the companies in the same industry are doing better.
VRSN has a Quick Ratio of 0.53. This is a bad value and indicates that VRSN is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.53, VRSN is not doing good in the industry: 91.76% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.33% over the past year.
The Earnings Per Share has been growing by 8.54% on average over the past years. This is quite good.
The Revenue has been growing slightly by 5.47% in the past year.
VRSN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.80% yearly.
EPS 1Y (TTM)8.33%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%9.66%
Revenue 1Y (TTM)5.47%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%7.3%
3.2 Future
The Earnings Per Share is expected to grow by 13.94% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.78% on average over the next years.
EPS Next Y13.43%
EPS Next 2Y10.1%
EPS Next 3Y12.17%
EPS Next 5Y13.94%
Revenue Next Year5.98%
Revenue Next 2Y4.46%
Revenue Next 3Y5.88%
Revenue Next 5Y6.78%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 27.46 indicates a quite expensive valuation of VRSN.
The rest of the industry has a similar Price/Earnings ratio as VRSN.
VRSN's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.19.
The Price/Forward Earnings ratio is 24.29, which indicates a rather expensive current valuation of VRSN.
VRSN's Price/Forward Earnings is on the same level as the industry average.
VRSN is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.50, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.46 | ||
| Fwd PE | 24.29 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as VRSN.
VRSN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. VRSN is cheaper than 63.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.89 | ||
| EV/EBITDA | 19.88 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of VRSN may justify a higher PE ratio.
A more expensive valuation may be justified as VRSN's earnings are expected to grow with 12.17% in the coming years.
PEG (NY)2.05
PEG (5Y)3.21
EPS Next 2Y10.1%
EPS Next 3Y12.17%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.28%, VRSN has a reasonable but not impressive dividend return.
VRSN's Dividend Yield is rather good when compared to the industry average which is at 2.50. VRSN pays more dividend than 82.35% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.33, VRSN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
5.2 History
VRSN does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y10.1%
EPS Next 3Y12.17%
235.6
+2.78 (+1.19%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners81.72%
Inst Owner Change-0.67%
Ins Owners0.56%
Ins Owner Change-9.11%
Market Cap22.01B
Revenue(TTM)1.63B
Net Income(TTM)811.00M
Analysts82
Price Target312.38 (32.59%)
Short Float %2.02%
Short Ratio2.13
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.22%
Min EPS beat(2)-1.38%
Max EPS beat(2)-1.07%
EPS beat(4)0
Avg EPS beat(4)-1.7%
Min EPS beat(4)-2.26%
Max EPS beat(4)-1.07%
EPS beat(8)4
Avg EPS beat(8)-0.2%
EPS beat(12)6
Avg EPS beat(12)0.04%
EPS beat(16)8
Avg EPS beat(16)0%
Revenue beat(2)0
Avg Revenue beat(2)-1.82%
Min Revenue beat(2)-2.22%
Max Revenue beat(2)-1.43%
Revenue beat(4)0
Avg Revenue beat(4)-1.83%
Min Revenue beat(4)-2.22%
Max Revenue beat(4)-1.43%
Revenue beat(8)0
Avg Revenue beat(8)-1.68%
Revenue beat(12)0
Avg Revenue beat(12)-1.78%
Revenue beat(16)0
Avg Revenue beat(16)-1.68%
PT rev (1m)0%
PT rev (3m)9.3%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)0.58%
EPS NY rev (1m)0.03%
EPS NY rev (3m)1.21%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.51%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.46 | ||
| Fwd PE | 24.29 | ||
| P/S | 13.53 | ||
| P/FCF | 21.89 | ||
| P/OCF | 21.3 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.88 |
EPS(TTM)8.58
EY3.64%
EPS(NY)9.7
Fwd EY4.12%
FCF(TTM)10.76
FCFY4.57%
OCF(TTM)11.06
OCFY4.69%
SpS17.41
BVpS-21.95
TBVpS-22.51
PEG (NY)2.05
PEG (5Y)3.21
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 57.78% | ||
| ROE | N/A | ||
| ROCE | 1138.72% | ||
| ROIC | 914.47% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 67.62% | ||
| PM (TTM) | 49.86% | ||
| GM | 87.97% | ||
| FCFM | 61.79% |
ROA(3y)47.16%
ROA(5y)45.43%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)-172.55%
ROCE(5y)-63.29%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y1.34%
OM growth 5Y0.75%
PM growth 3Y-5.15%
PM growth 5Y0.3%
GM growth 3Y0.84%
GM growth 5Y0.55%
F-Score7
Asset Turnover1.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.78 | ||
| Debt/EBITDA | 1.58 | ||
| Cap/Depr | 83.48% | ||
| Cap/Sales | 1.71% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.15% | ||
| Profit Quality | 123.95% | ||
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z | -4.96 |
F-Score7
WACC9.05%
ROIC/WACC101.05
Cap/Depr(3y)79.48%
Cap/Depr(5y)88.52%
Cap/Sales(3y)2.26%
Cap/Sales(5y)2.84%
Profit Quality(3y)109.8%
Profit Quality(5y)101.96%
High Growth Momentum
Growth
EPS 1Y (TTM)8.33%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%9.66%
EPS Next Y13.43%
EPS Next 2Y10.1%
EPS Next 3Y12.17%
EPS Next 5Y13.94%
Revenue 1Y (TTM)5.47%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%7.3%
Revenue Next Year5.98%
Revenue Next 2Y4.46%
Revenue Next 3Y5.88%
Revenue Next 5Y6.78%
EBIT growth 1Y4.69%
EBIT growth 3Y6.88%
EBIT growth 5Y5.59%
EBIT Next Year12.78%
EBIT Next 3Y8.22%
EBIT Next 5Y8.42%
FCF growth 1Y22.89%
FCF growth 3Y5.06%
FCF growth 5Y4.15%
OCF growth 1Y19.22%
OCF growth 3Y3.79%
OCF growth 5Y3.67%
VERISIGN INC / VRSN FAQ
Can you provide the ChartMill fundamental rating for VERISIGN INC?
ChartMill assigns a fundamental rating of 5 / 10 to VRSN.
Can you provide the valuation status for VERISIGN INC?
ChartMill assigns a valuation rating of 3 / 10 to VERISIGN INC (VRSN). This can be considered as Overvalued.
How profitable is VERISIGN INC (VRSN) stock?
VERISIGN INC (VRSN) has a profitability rating of 7 / 10.
What is the valuation of VERISIGN INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for VERISIGN INC (VRSN) is 27.46 and the Price/Book (PB) ratio is -10.73.
How financially healthy is VERISIGN INC?
The financial health rating of VERISIGN INC (VRSN) is 3 / 10.