VERISIGN INC (VRSN) Stock Fundamental Analysis
USA - NASDAQ:VRSN - US92343E1029 - Common Stock
272.98 USD
-2.46 (-0.89%)
272.98 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to VRSN. VRSN was compared to 87 industry peers in the IT Services industry. While VRSN has a great profitability rating, there are quite some concerns on its financial health. 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.
VRSN had a positive operating cash flow in the past year.
Each year in the past 5 years VRSN has been profitable.
In the past 5 years VRSN always reported a positive cash flow from operatings.
1.2 Ratios
VRSN has a better Return On Assets (56.79%) than 100.00% of its industry peers.
VRSN's Return On Invested Capital of 587.94% is amongst the best of the industry. VRSN outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 56.79% | ||
| ROE | N/A | ||
| ROIC | 587.94% |
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 50.03%, 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 Operating Margin of 67.89%. This is amongst the best in the industry. VRSN outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of VRSN has remained more or less at the same level.
VRSN has a better Gross Margin (87.88%) than 98.85% of its industry peers.
VRSN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 67.89% | ||
| PM (TTM) | 50.03% | ||
| GM | 87.88% |
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.
VRSN has less shares outstanding than it did 1 year ago.
VRSN has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, VRSN has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of -4.40, we must say that VRSN is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of VRSN (-4.40) is worse than 85.06% of its industry peers.
The Debt to FCF ratio of VRSN is 1.88, which is an excellent value as it means it would take VRSN, only 1.88 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.88, VRSN is doing good in the industry, outperforming 72.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.88 | ||
| Altman-Z | -4.4 |
ROIC/WACC64.05
WACC9.18%
2.3 Liquidity
A Current Ratio of 0.54 indicates that VRSN may have some problems paying its short term obligations.
VRSN has a worse Current ratio (0.54) than 90.80% of its industry peers.
VRSN has a Quick Ratio of 0.54. 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 worse Quick ratio (0.54) than 90.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.54 | ||
| Quick Ratio | 0.54 |
3. Growth
3.1 Past
VRSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.11%, which is quite good.
The Earnings Per Share has been growing by 8.54% on average over the past years. This is quite good.
VRSN shows a small growth in Revenue. In the last year, the Revenue has grown by 4.59%.
VRSN shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.80% yearly.
EPS 1Y (TTM)9.11%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%9.95%
Revenue 1Y (TTM)4.59%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%5.89%
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 13.94% on average per year.
Based on estimates for the next years, VRSN will show a small growth in Revenue. The Revenue will grow by 6.78% on average per year.
EPS Next Y13.4%
EPS Next 2Y10.06%
EPS Next 3Y12.13%
EPS Next 5Y13.94%
Revenue Next Year5.98%
Revenue Next 2Y4.43%
Revenue Next 3Y5.84%
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 32.58 indicates a quite expensive valuation of VRSN.
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 (27.86), we can say VRSN is valued inline with the index average.
The Price/Forward Earnings ratio is 28.17, which means the current valuation is very expensive for VRSN.
VRSN's Price/Forward Earnings ratio is in line with the industry average.
VRSN's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 23.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.58 | ||
| Fwd PE | 28.17 |
4.2 Price Multiples
VRSN's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of VRSN is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.84 | ||
| EV/EBITDA | 23.79 |
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 a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as VRSN's earnings are expected to grow with 12.13% in the coming years.
PEG (NY)2.43
PEG (5Y)3.81
EPS Next 2Y10.06%
EPS Next 3Y12.13%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.12%, 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 2.48. VRSN pays more dividend than 81.61% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, VRSN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.12% |
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 2Y10.06%
EPS Next 3Y12.13%
272.98
-2.46 (-0.89%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners81.72%
Inst Owner Change-1.24%
Ins Owners0.56%
Ins Owner Change-7.34%
Market Cap25.50B
Analysts82
Price Target317.48 (16.3%)
Short Float %2.44%
Short Ratio2.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.12% |
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)-1.82%
Min EPS beat(2)-2.26%
Max EPS beat(2)-1.38%
EPS beat(4)1
Avg EPS beat(4)-1.2%
Min EPS beat(4)-2.26%
Max EPS beat(4)0.97%
EPS beat(8)4
Avg EPS beat(8)-0.16%
EPS beat(12)7
Avg EPS beat(12)0.18%
EPS beat(16)9
Avg EPS beat(16)0.1%
Revenue beat(2)0
Avg Revenue beat(2)-2.03%
Min Revenue beat(2)-2.22%
Max Revenue beat(2)-1.84%
Revenue beat(4)0
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-2.22%
Max Revenue beat(4)-1.84%
Revenue beat(8)0
Avg Revenue beat(8)-1.81%
Revenue beat(12)0
Avg Revenue beat(12)-1.81%
Revenue beat(16)0
Avg Revenue beat(16)-1.68%
PT rev (1m)0%
PT rev (3m)16.96%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.31%
EPS NY rev (1m)0%
EPS NY rev (3m)1.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.61%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.58 | ||
| Fwd PE | 28.17 | ||
| P/S | 15.95 | ||
| P/FCF | 26.84 | ||
| P/OCF | 26.05 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 23.79 |
EPS(TTM)8.38
EY3.07%
EPS(NY)9.69
Fwd EY3.55%
FCF(TTM)10.17
FCFY3.73%
OCF(TTM)10.48
OCFY3.84%
SpS17.11
BVpS-21.34
TBVpS-21.91
PEG (NY)2.43
PEG (5Y)3.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 56.79% | ||
| ROE | N/A | ||
| ROCE | 732.12% | ||
| ROIC | 587.94% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 67.89% | ||
| PM (TTM) | 50.03% | ||
| GM | 87.88% | ||
| FCFM | 59.44% |
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 Turnover1.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.88 | ||
| Debt/EBITDA | 1.6 | ||
| Cap/Depr | 82% | ||
| Cap/Sales | 1.8% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.38% | ||
| Profit Quality | 118.82% | ||
| Current Ratio | 0.54 | ||
| Quick Ratio | 0.54 | ||
| Altman-Z | -4.4 |
F-Score7
WACC9.18%
ROIC/WACC64.05
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)9.11%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%9.95%
EPS Next Y13.4%
EPS Next 2Y10.06%
EPS Next 3Y12.13%
EPS Next 5Y13.94%
Revenue 1Y (TTM)4.59%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%5.89%
Revenue Next Year5.98%
Revenue Next 2Y4.43%
Revenue Next 3Y5.84%
Revenue Next 5Y6.78%
EBIT growth 1Y4.76%
EBIT growth 3Y6.88%
EBIT growth 5Y5.59%
EBIT Next Year12.78%
EBIT Next 3Y8.22%
EBIT Next 5Y8.42%
FCF growth 1Y10.9%
FCF growth 3Y5.06%
FCF growth 5Y4.15%
OCF growth 1Y10.79%
OCF growth 3Y3.79%
OCF growth 5Y3.67%