Stock of the Day

February 7, 2020

VeriSign (VRSN)

$287.49
+$1.17 (+0.4%)
Market Cap: $26.89B

About VeriSign

VeriSign, Inc., together with its subsidiaries, provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names worldwide. The company enables the security, stability, and resiliency of internet infrastructure and services, including providing root zone maintainer services, operating two of thirteen internet root servers; and offering registration services and authoritative resolution for the .com and .net domains, which supports global e-commerce. It operates directory for .name and .cc; and back-end systems for .edu, domain names. VeriSign, Inc. was incorporated in 1995 and is headquartered in Reston, Virginia.

VeriSign Bull Case

Here are some ways that investors could benefit from investing in VeriSign, Inc.:

  • VeriSign, Inc. has demonstrated strong revenue growth, with a recent quarterly revenue increase of approximately 4.7% compared to the same period last year, indicating a solid demand for its services.
  • The company maintains a high net margin of over 50%, suggesting efficient operations and the ability to convert a significant portion of revenue into profit.
  • With a current stock price around $281.88, investors may find it appealing given the company's market capitalization of approximately $26.47 billion, reflecting its substantial presence in the domain name registry market.
  • VeriSign, Inc. has a consistent dividend payout ratio of about 37.65%, which can provide a steady income stream for investors looking for dividend-paying stocks.
  • Recent analyst upgrades, including a shift from a "hold" to a "buy" rating, along with increased price targets, suggest positive market sentiment and potential for stock appreciation.

VeriSign Bear Case

Investors should be bearish about investing in VeriSign, Inc. for these reasons:

  • The company has reported a negative return on equity of approximately 41.37%, which may raise concerns about its ability to generate returns for shareholders.
  • Insider selling activity has been notable, with executives recently selling shares, which could signal a lack of confidence in the company's short-term prospects.
  • Despite revenue growth, the company's earnings per share have not shown significant improvement, which may indicate challenges in profitability enhancement.
  • The stock has experienced fluctuations, with a 1-year high of around $290.38 and a low of approximately $172.49, suggesting volatility that could deter risk-averse investors.
  • With a P/E ratio of about 34.46, the stock may be considered overvalued compared to industry peers, potentially limiting future price appreciation.
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