VERISIGN INC (VRSN)
US92343E1029 - Common Stock
Overall VRSN gets a fundamental rating of 5 out of 10. We evaluated VRSN against 84 industry peers in the IT Services industry. VRSN has an excellent profitability rating, but there are concerns on its financial health. VRSN has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
VRSN had positive earnings in the past year.
VRSN had a positive operating cash flow in the past year.
In the past 5 years VRSN has always been profitable.
VRSN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 48.21%, VRSN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
VRSN has a Return On Invested Capital of 158.78%. This is amongst the best in the industry. VRSN outperforms 100.00% of its industry peers.
VRSN had an Average Return On Invested Capital over the past 3 years of 114.03%. This is significantly above the industry average of 12.42%.
The last Return On Invested Capital (158.78%) for VRSN is above the 3 year average (114.03%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 48.21% | ||
| ROE | N/A | ||
| ROIC | 158.78% |
ROA(3y)41.73%
ROA(5y)40.87%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)114.03%
ROIC(5y)99.93%
1.3 Margins
VRSN has a better Profit Margin (55.06%) than 100.00% of its industry peers.
In the last couple of years the Profit Margin of VRSN has grown nicely.
With an excellent Operating Margin value of 67.30%, VRSN belongs to the best 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.
Looking at the Gross Margin, with a value of 87.01%, VRSN belongs to the top of the industry, outperforming 97.62% 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 | 67.3% | ||
| PM (TTM) | 55.06% | ||
| GM | 87.01% |
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%
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.
Compared to 5 years ago, VRSN has less shares outstanding
Compared to 1 year ago, VRSN has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of -4.99, we must say that VRSN is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of -4.99, VRSN is not doing good in the industry: 91.67% of the companies in the same industry are doing better.
The Debt to FCF ratio of VRSN is 2.22, which is a good value as it means it would take VRSN, 2.22 years of fcf income to pay off all of its debts.
VRSN's Debt to FCF ratio of 2.22 is fine compared to the rest of the industry. VRSN outperforms 70.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.22 | ||
| Altman-Z | -4.99 |
ROIC/WACC15.19
WACC10.45%
2.3 Liquidity
VRSN has a Current Ratio of 0.81. This is a bad value and indicates that VRSN is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of VRSN (0.81) is worse than 84.52% of its industry peers.
VRSN has a Quick Ratio of 0.81. This is a bad value and indicates that VRSN is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.81, VRSN is doing worse than 84.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
VRSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.42%, which is quite good.
Measured over the past 5 years, VRSN shows a small growth in Earnings Per Share. The EPS has been growing by 7.43% on average per year.
VRSN shows a small growth in Revenue. In the last year, the Revenue has grown by 4.89%.
VRSN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.21% yearly.
EPS 1Y (TTM)14.42%
EPS 3Y7.8%
EPS 5Y7.43%
EPS growth Q2Q12.94%
Revenue 1Y (TTM)4.89%
Revenue growth 3Y5.68%
Revenue growth 5Y4.21%
Revenue growth Q2Q5.46%
3.2 Future
The Earnings Per Share is expected to grow by 11.02% on average over the next years. This is quite good.
VRSN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.25% yearly.
EPS Next Y11.59%
EPS Next 2Y11.67%
EPS Next 3Y10.19%
EPS Next 5Y11.02%
Revenue Next Year5.39%
Revenue Next 2Y5.9%
Revenue Next 3Y4.82%
Revenue Next 5Y5.25%
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
With a Price/Earnings ratio of 22.89, VRSN is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of VRSN is on the same level as its industry peers.
When comparing the Price/Earnings ratio of VRSN to the average of the S&P500 Index (28.60), we can say VRSN is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 18.91, the valuation of VRSN can be described as rather expensive.
VRSN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. VRSN is cheaper than 65.48% of the companies in the same industry.
VRSN's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.89 | ||
| Fwd PE | 18.91 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VRSN is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, VRSN is valued a bit cheaper than 67.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.04 | ||
| EV/EBITDA | 16.67 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
VRSN has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.97
PEG (5Y)3.08
EPS Next 2Y11.67%
EPS Next 3Y10.19%
5. Dividend
5.1 Amount
No dividends for VRSN!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
VERISIGN INC
NASDAQ:VRSN (5/17/2024, 7:00:02 PM)
After market: 170.75 0 (0%)170.75
-0.21 (-0.12%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap17.01B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.89 | ||
| Fwd PE | 18.91 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.97
PEG (5Y)3.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 48.21% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 67.3% | ||
| PM (TTM) | 55.06% | ||
| GM | 87.01% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.88
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)14.42%
EPS 3Y7.8%
EPS 5Y
EPS growth Q2Q
EPS Next Y11.59%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.89%
Revenue growth 3Y5.68%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
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