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VERISIGN INC (VRSN) Stock Fundamental Analysis

NASDAQ:VRSN - Nasdaq - US92343E1029 - Common Stock - Currency: USD

220.91  +2.41 (+1.1%)

After market: 220.91 0 (0%)

Fundamental Rating

5

VRSN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 82 industry peers in the IT Services industry. VRSN has an excellent profitability rating, but there are concerns on its financial health. VRSN is not valued too expensively and it also shows a decent growth rate.


Dividend Valuation Growth Profitability Health

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8

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.
VRSN had positive earnings in each of the past 5 years.
VRSN had a positive operating cash flow in each of the past 5 years.
VRSN Yearly Net Income VS EBIT VS OCF VS FCFVRSN Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

1.2 Ratios

With an excellent Return On Assets value of 58.75%, VRSN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for VRSN is significantly above the industry average of 9.88%.
The 3 year average ROIC (114.03%) for VRSN is well above the current ROIC(%ROIC%%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 58.75%
ROE N/A
ROIC N/A
ROA(3y)41.73%
ROA(5y)40.87%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)114.03%
ROIC(5y)99.93%
VRSN Yearly ROA, ROE, ROICVRSN Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50 -50 100

1.3 Margins

VRSN's Profit Margin of 55.69% is amongst the best of the industry. VRSN outperforms 100.00% of its industry peers.
VRSN's Profit Margin has improved in the last couple of years.
VRSN has a Operating Margin of 68.12%. This is amongst the best in the industry. VRSN outperforms 100.00% of its industry peers.
VRSN's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 87.58%, VRSN belongs to the best of the industry, outperforming 97.47% of the companies in the same industry.
In the last couple of years the Gross Margin of VRSN has remained more or less at the same level.
Industry RankSector Rank
OM 68.12%
PM (TTM) 55.69%
GM 87.58%
OM growth 3Y0.95%
OM growth 5Y1.19%
PM growth 3Y-5.27%
PM growth 5Y2.69%
GM growth 3Y0.4%
GM growth 5Y0.61%
VRSN Yearly Profit, Operating, Gross MarginsVRSN Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60 80

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3

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.
VRSN has less shares outstanding than it did 5 years ago.
The debt/assets ratio for VRSN has been reduced compared to a year ago.
VRSN Yearly Shares OutstandingVRSN Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M 100M
VRSN Yearly Total Debt VS Total AssetsVRSN Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B 2.5B

2.2 Solvency

Based on the Altman-Z score of -5.74, we must say that VRSN is in the distress zone and has some risk of bankruptcy.
VRSN's Altman-Z score of -5.74 is on the low side compared to the rest of the industry. VRSN is outperformed by 93.67% of its industry peers.
VRSN has a debt to FCF ratio of 2.10. This is a good value and a sign of high solvency as VRSN would need 2.10 years to pay back of all of its debts.
The Debt to FCF ratio of VRSN (2.10) is better than 68.35% of its industry peers.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 2.1
Altman-Z -5.74
ROIC/WACCN/A
WACC11.39%
VRSN Yearly LT Debt VS Equity VS FCFVRSN Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B -1B

2.3 Liquidity

VRSN has a Current Ratio of 0.47. 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 has a Current ratio of 0.47. This is amonst the worse of the industry: VRSN underperforms 93.67% of its industry peers.
A Quick Ratio of 0.47 indicates that VRSN may have some problems paying its short term obligations.
VRSN has a worse Quick ratio (0.47) than 93.67% of its industry peers.
Industry RankSector Rank
Current Ratio 0.47
Quick Ratio 0.47
VRSN Yearly Current Assets VS Current LiabilitesVRSN Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 12.82% over the past year.
VRSN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.43% yearly.
Looking at the last year, VRSN shows a small growth in Revenue. The Revenue has grown by 4.08% in the last year.
Measured over the past years, VRSN shows a small growth in Revenue. The Revenue has been growing by 4.21% on average per year.
EPS 1Y (TTM)12.82%
EPS 3Y7.8%
EPS 5Y7.43%
EPS Q2Q%13.11%
Revenue 1Y (TTM)4.08%
Revenue growth 3Y5.68%
Revenue growth 5Y4.21%
Sales Q2Q%3.8%

3.2 Future

Based on estimates for the next years, VRSN will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.73% on average per year.
Based on estimates for the next years, VRSN will show a small growth in Revenue. The Revenue will grow by 4.36% on average per year.
EPS Next Y12.99%
EPS Next 2Y10.4%
EPS Next 3Y8.71%
EPS Next 5Y9.73%
Revenue Next Year4.4%
Revenue Next 2Y3.93%
Revenue Next 3Y3.22%
Revenue Next 5Y4.36%

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 stable: in the next years the growth will be about the same than in the last years.
VRSN Yearly Revenue VS EstimatesVRSN Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 500M 1B 1.5B 2B
VRSN Yearly EPS VS EstimatesVRSN Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 5 10 15

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5

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 27.89, which means the current valuation is very expensive for VRSN.
Compared to the rest of the industry, the Price/Earnings ratio of VRSN indicates a somewhat cheap valuation: VRSN is cheaper than 60.76% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of VRSN to the average of the S&P500 Index (28.58), we can say VRSN is valued inline with the index average.
A Price/Forward Earnings ratio of 25.04 indicates a quite expensive valuation of VRSN.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VRSN indicates a somewhat cheap valuation: VRSN is cheaper than 63.29% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 95.03. VRSN is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 27.89
Fwd PE 25.04
VRSN Price Earnings VS Forward Price EarningsVRSN Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, VRSN is valued a bit cheaper than 65.82% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, VRSN is valued a bit cheaper than 68.35% of the companies in the same industry.
Industry RankSector Rank
P/FCF 24.93
EV/EBITDA 19.98
VRSN Per share dataVRSN EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 -10 -20

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 excellent profitability rating of VRSN may justify a higher PE ratio.
PEG (NY)2.15
PEG (5Y)3.76
EPS Next 2Y10.4%
EPS Next 3Y8.71%

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0

5. Dividend

5.1 Amount

No dividends for VRSN!.
Industry RankSector Rank
Dividend Yield N/A

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VERISIGN INC

NASDAQ:VRSN (2/5/2025, 8:00:01 PM)

After market: 220.91 0 (0%)

220.91

+2.41 (+1.1%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)10-24 2024-10-24/amc
Earnings (Next)02-06 2025-02-06/amc
Inst Owners81.68%
Inst Owner Change1.82%
Ins Owners0.74%
Ins Owner Change-1.01%
Market Cap21.23B
Analysts82
Price Target232.6 (5.29%)
Short Float %2.33%
Short Ratio2.8
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.46%
Min EPS beat(2)0.97%
Max EPS beat(2)1.94%
EPS beat(4)4
Avg EPS beat(4)1.3%
Min EPS beat(4)0.97%
Max EPS beat(4)1.94%
EPS beat(8)6
Avg EPS beat(8)0.92%
EPS beat(12)8
Avg EPS beat(12)0.57%
EPS beat(16)11
Avg EPS beat(16)0.57%
Revenue beat(2)0
Avg Revenue beat(2)-1.74%
Min Revenue beat(2)-1.85%
Max Revenue beat(2)-1.63%
Revenue beat(4)0
Avg Revenue beat(4)-1.53%
Min Revenue beat(4)-1.85%
Max Revenue beat(4)-1.31%
Revenue beat(8)0
Avg Revenue beat(8)-1.75%
Revenue beat(12)0
Avg Revenue beat(12)-1.63%
Revenue beat(16)0
Avg Revenue beat(16)-1.67%
PT rev (1m)4.27%
PT rev (3m)11.38%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)-2.03%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.03%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
Industry RankSector Rank
PE 27.89
Fwd PE 25.04
P/S 13.76
P/FCF 24.93
P/OCF 24.25
P/B N/A
P/tB N/A
EV/EBITDA 19.98
EPS(TTM)7.92
EY3.59%
EPS(NY)8.82
Fwd EY3.99%
FCF(TTM)8.86
FCFY4.01%
OCF(TTM)9.11
OCFY4.12%
SpS16.05
BVpS-19.78
TBVpS-20.32
PEG (NY)2.15
PEG (5Y)3.76
Profitability
Industry RankSector Rank
ROA 58.75%
ROE N/A
ROCE -1636.6%
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM 68.12%
PM (TTM) 55.69%
GM 87.58%
FCFM 55.22%
ROA(3y)41.73%
ROA(5y)40.87%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)114.03%
ROIC(5y)99.93%
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)142.29%
ROCE(5y)124.7%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y0.95%
OM growth 5Y1.19%
PM growth 3Y-5.27%
PM growth 5Y2.69%
GM growth 3Y0.4%
GM growth 5Y0.61%
F-Score8
Asset Turnover1.05
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 2.1
Debt/EBITDA 1.37
Cap/Depr 61.3%
Cap/Sales 1.53%
Interest Coverage 250
Cash Conversion 80.36%
Profit Quality 99.16%
Current Ratio 0.47
Quick Ratio 0.47
Altman-Z -5.74
F-Score8
WACC11.39%
ROIC/WACCN/A
Cap/Depr(3y)90.97%
Cap/Depr(5y)90.7%
Cap/Sales(3y)2.99%
Cap/Sales(5y)3.14%
Profit Quality(3y)104.74%
Profit Quality(5y)103.01%
High Growth Momentum
Growth
EPS 1Y (TTM)12.82%
EPS 3Y7.8%
EPS 5Y7.43%
EPS Q2Q%13.11%
EPS Next Y12.99%
EPS Next 2Y10.4%
EPS Next 3Y8.71%
EPS Next 5Y9.73%
Revenue 1Y (TTM)4.08%
Revenue growth 3Y5.68%
Revenue growth 5Y4.21%
Sales Q2Q%3.8%
Revenue Next Year4.4%
Revenue Next 2Y3.93%
Revenue Next 3Y3.22%
Revenue Next 5Y4.36%
EBIT growth 1Y6.15%
EBIT growth 3Y6.68%
EBIT growth 5Y5.45%
EBIT Next Year8.29%
EBIT Next 3Y4.98%
EBIT Next 5Y5.44%
FCF growth 1Y8.18%
FCF growth 3Y5.57%
FCF growth 5Y4.1%
OCF growth 1Y6.68%
OCF growth 3Y5.35%
OCF growth 5Y4.12%