VERISIGN INC (VRSN) Stock Fundamental Analysis
NASDAQ:VRSN - Nasdaq - US92343E1029 - Common Stock - Currency: USD
Taking everything into account, VRSN scores 4 out of 10 in our fundamental rating. VRSN was compared to 81 industry peers in the IT Services industry. There are concerns on the financial health of VRSN while its profitability can be described as average. While showing a medium growth rate, VRSN is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
VRSN had positive earnings in the past year.
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 has a better Return On Assets (55.86%) than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 55.86% | ||
| ROE | N/A | ||
| ROIC | N/A |
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
VRSN has a better Profit Margin (50.45%) than 100.00% of its industry peers.
In the last couple of years the Profit Margin of VRSN has remained more or less at the same level.
Looking at the Operating Margin, with a value of 67.95%, VRSN belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
VRSN's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 87.71%, VRSN belongs to the best of the industry, outperforming 97.53% of the companies in the same industry.
VRSN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 67.95% | ||
| PM (TTM) | 50.45% | ||
| GM | 87.71% |
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
VRSN does not have a ROIC to compare to the WACC, probably because it is not profitable.
VRSN has less shares outstanding than it did 1 year ago.
VRSN has less shares outstanding than it did 5 years ago.
The debt/assets ratio for VRSN is higher compared to a year ago.
2.2 Solvency
VRSN has an Altman-Z score of -5.53. This is a bad value and indicates that VRSN is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of -5.53, VRSN is not doing good in the industry: 88.89% of the companies in the same industry are doing better.
VRSN has a debt to FCF ratio of 2.05. This is a good value and a sign of high solvency as VRSN would need 2.05 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.05, VRSN is doing good in the industry, outperforming 70.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.05 | ||
| Altman-Z | -5.53 |
ROIC/WACCN/A
WACC9.32%
2.3 Liquidity
A Current Ratio of 0.43 indicates that VRSN may have some problems paying its short term obligations.
The Current ratio of VRSN (0.43) is worse than 91.36% of its industry peers.
VRSN has a Quick Ratio of 0.43. This is a bad value and indicates that VRSN is not financially healthy enough and could expect problems in meeting its short term obligations.
VRSN's Quick ratio of 0.43 is on the low side compared to the rest of the industry. VRSN is outperformed by 90.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.43 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.50% over the past year.
Measured over the past years, VRSN shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.54% on average per year.
VRSN shows a small growth in Revenue. In the last year, the Revenue has grown by 4.31%.
Measured over the past years, VRSN shows a small growth in Revenue. The Revenue has been growing by 4.80% on average per year.
EPS 1Y (TTM)10.5%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%4.17%
Revenue 1Y (TTM)4.31%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%3.94%
3.2 Future
VRSN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.59% yearly.
VRSN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.35% yearly.
EPS Next Y10.95%
EPS Next 2Y8.24%
EPS Next 3Y10.35%
EPS Next 5Y11.59%
Revenue Next Year4.28%
Revenue Next 2Y2.7%
Revenue Next 3Y4.69%
Revenue Next 5Y6.35%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
Based on the Price/Earnings ratio of 30.83, the valuation of VRSN can be described as expensive.
VRSN's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of VRSN to the average of the S&P500 Index (28.29), we can say VRSN is valued inline with the index average.
VRSN is valuated quite expensively with a Price/Forward Earnings ratio of 27.79.
VRSN's Price/Forward Earnings ratio is in line with the industry average.
VRSN is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.83 | ||
| Fwd PE | 27.79 |
4.2 Price Multiples
VRSN's Enterprise Value to EBITDA ratio is in line with the industry average.
VRSN's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.68 | ||
| EV/EBITDA | 22.04 |
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.
PEG (NY)2.82
PEG (5Y)3.61
EPS Next 2Y8.24%
EPS Next 3Y10.35%
5. Dividend
5.1 Amount
VRSN does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
246.67
+0.74 (+0.3%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners82.02%
Inst Owner Change0.01%
Ins Owners0.7%
Ins Owner Change4.09%
Market Cap23.22B
Analysts80
Price Target248.58 (0.77%)
Short Float %2.27%
Short Ratio2.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.57%
Min EPS beat(2)-2.11%
Max EPS beat(2)0.97%
EPS beat(4)3
Avg EPS beat(4)0.51%
Min EPS beat(4)-2.11%
Max EPS beat(4)1.94%
EPS beat(8)5
Avg EPS beat(8)0.24%
EPS beat(12)7
Avg EPS beat(12)0.15%
EPS beat(16)10
Avg EPS beat(16)0.14%
Revenue beat(2)0
Avg Revenue beat(2)-1.85%
Min Revenue beat(2)-1.85%
Max Revenue beat(2)-1.85%
Revenue beat(4)0
Avg Revenue beat(4)-1.67%
Min Revenue beat(4)-1.85%
Max Revenue beat(4)-1.33%
Revenue beat(8)0
Avg Revenue beat(8)-1.84%
Revenue beat(12)0
Avg Revenue beat(12)-1.63%
Revenue beat(16)0
Avg Revenue beat(16)-1.66%
PT rev (1m)2.81%
PT rev (3m)11.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.67%
EPS NY rev (1m)0%
EPS NY rev (3m)0.6%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.25%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.83 | ||
| Fwd PE | 27.79 | ||
| P/S | 14.98 | ||
| P/FCF | 26.68 | ||
| P/OCF | 25.85 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.04 |
EPS(TTM)8
EY3.24%
EPS(NY)8.88
Fwd EY3.6%
FCF(TTM)9.24
FCFY3.75%
OCF(TTM)9.54
OCFY3.87%
SpS16.46
BVpS-20.7
TBVpS-21.25
PEG (NY)2.82
PEG (5Y)3.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 55.86% | ||
| ROE | N/A | ||
| ROCE | -849.28% | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 67.95% | ||
| PM (TTM) | 50.45% | ||
| GM | 87.71% | ||
| FCFM | 56.15% |
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%
ROICexcg growth 3YN/A
ROICexcg 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 Turnover1.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.05 | ||
| Debt/EBITDA | 1.36 | ||
| Cap/Depr | 76.15% | ||
| Cap/Sales | 1.8% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 82.42% | ||
| Profit Quality | 111.3% | ||
| Current Ratio | 0.43 | ||
| Quick Ratio | 0.43 | ||
| Altman-Z | -5.53 |
F-Score7
WACC9.32%
ROIC/WACCN/A
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)10.5%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%4.17%
EPS Next Y10.95%
EPS Next 2Y8.24%
EPS Next 3Y10.35%
EPS Next 5Y11.59%
Revenue 1Y (TTM)4.31%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%3.94%
Revenue Next Year4.28%
Revenue Next 2Y2.7%
Revenue Next 3Y4.69%
Revenue Next 5Y6.35%
EBIT growth 1Y5.76%
EBIT growth 3Y6.88%
EBIT growth 5Y5.59%
EBIT Next Year12.78%
EBIT Next 3Y7%
EBIT Next 5Y8.16%
FCF growth 1Y8.23%
FCF growth 3Y5.06%
FCF growth 5Y4.15%
OCF growth 1Y5.72%
OCF growth 3Y3.79%
OCF growth 5Y3.67%