VERISIGN INC (VRSN) Stock Fundamental Analysis
USA - NASDAQ:VRSN - US92343E1029 - Common Stock
247.08 USD
-3.5 (-1.4%)
246.5 USD
-0.58 (-0.23%)
We assign a fundamental rating of 5 out of 10 to VRSN. VRSN was compared to 85 industry peers in the IT Services industry. While VRSN has a great profitability rating, there are quite some concerns on its financial health. VRSN is valied quite expensively at the moment, while it does show a decent 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.
VRSN had positive earnings in each of the past 5 years.
Each year in the past 5 years VRSN had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 56.79%, VRSN belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
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
The Profit Margin of VRSN (50.03%) is better than 100.00% of its industry peers.
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.
VRSN's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 87.88%, VRSN belongs to the top of the industry, outperforming 98.82% 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 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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.
VRSN has a worse debt/assets ratio than last year.
2.2 Solvency
VRSN has an Altman-Z score of -4.87. This is a bad value and indicates that VRSN is not financially healthy and even has some risk of bankruptcy.
VRSN has a worse Altman-Z score (-4.87) than 88.24% 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.
Looking at the Debt to FCF ratio, with a value of 1.88, VRSN is in the better half of the industry, outperforming 72.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.88 | ||
| Altman-Z | -4.87 |
ROIC/WACC65.18
WACC9.02%
2.3 Liquidity
A Current Ratio of 0.54 indicates that VRSN may have some problems paying its short term obligations.
VRSN's Current ratio of 0.54 is on the low side compared to the rest of the industry. VRSN is outperformed by 91.76% 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.
With a Quick ratio value of 0.54, VRSN is not doing good in the industry: 91.76% of the companies in the same industry are doing better.
| 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 8.33%, which is quite good.
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.
The Revenue has been growing slightly by 4.31% in the past year.
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)8.33%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%9.66%
Revenue 1Y (TTM)4.31%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%7.3%
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.
VRSN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.78% yearly.
EPS Next Y13.43%
EPS Next 2Y10.1%
EPS Next 3Y12.17%
EPS Next 5Y13.94%
Revenue Next Year5.98%
Revenue Next 2Y4.46%
Revenue Next 3Y5.88%
Revenue Next 5Y6.78%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
VRSN is valuated quite expensively with a Price/Earnings ratio of 28.80.
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 (26.89), we can say VRSN is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 25.48, the valuation of VRSN can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as VRSN.
VRSN's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.99.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.8 | ||
| Fwd PE | 25.48 |
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.
The rest of the industry has a similar Price/Free Cash Flow ratio as VRSN.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.29 | ||
| EV/EBITDA | 21.42 |
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.
A more expensive valuation may be justified as VRSN's earnings are expected to grow with 12.17% in the coming years.
PEG (NY)2.14
PEG (5Y)3.37
EPS Next 2Y10.1%
EPS Next 3Y12.17%
5. Dividend
5.1 Amount
VRSN has a Yearly Dividend Yield of 1.25%.
VRSN's Dividend Yield is rather good when compared to the industry average which is at 2.51. VRSN pays more dividend than 81.18% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.31, VRSN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.25% |
5.2 History
VRSN is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y10.1%
EPS Next 3Y12.17%
247.08
-3.5 (-1.4%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners81.72%
Inst Owner Change-0.67%
Ins Owners0.56%
Ins Owner Change-9.11%
Market Cap23.08B
Revenue(TTM)1.56B
Net Income(TTM)799.50M
Analysts82
Price Target317.48 (28.49%)
Short Float %2.22%
Short Ratio2.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.25% |
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)9.3%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)0.58%
EPS NY rev (1m)0.03%
EPS NY rev (3m)1.21%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.51%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.8 | ||
| Fwd PE | 25.48 | ||
| P/S | 14.44 | ||
| P/FCF | 24.29 | ||
| P/OCF | 23.58 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.42 |
EPS(TTM)8.58
EY3.47%
EPS(NY)9.7
Fwd EY3.92%
FCF(TTM)10.17
FCFY4.12%
OCF(TTM)10.48
OCFY4.24%
SpS17.11
BVpS-21.34
TBVpS-21.91
PEG (NY)2.14
PEG (5Y)3.37
Graham NumberN/A
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%
ROICexgc growth 3YN/A
ROICexgc 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 | -4.87 |
F-Score7
WACC9.02%
ROIC/WACC65.18
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)8.33%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%9.66%
EPS Next Y13.43%
EPS Next 2Y10.1%
EPS Next 3Y12.17%
EPS Next 5Y13.94%
Revenue 1Y (TTM)4.31%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%7.3%
Revenue Next Year5.98%
Revenue Next 2Y4.46%
Revenue Next 3Y5.88%
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%
VERISIGN INC / VRSN FAQ
Can you provide the ChartMill fundamental rating for VERISIGN INC?
ChartMill assigns a fundamental rating of 5 / 10 to VRSN.
Can you provide the valuation status for VERISIGN INC?
ChartMill assigns a valuation rating of 3 / 10 to VERISIGN INC (VRSN). This can be considered as Overvalued.
How profitable is VERISIGN INC (VRSN) stock?
VERISIGN INC (VRSN) has a profitability rating of 7 / 10.
What is the valuation of VERISIGN INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for VERISIGN INC (VRSN) is 28.8 and the Price/Book (PB) ratio is -11.58.
How financially healthy is VERISIGN INC?
The financial health rating of VERISIGN INC (VRSN) is 3 / 10.