VERISIGN INC (VRSN)

US92343E1029 - Common Stock

189.51  +0.41 (+0.22%)

After market: 189.51 0 (0%)

Fundamental Rating

5

Overall VRSN gets a fundamental rating of 5 out of 10. We evaluated VRSN against 86 industry peers in the IT Services industry. While VRSN has a great profitability rating, there are quite some concerns on its financial health. VRSN has a correct valuation and a medium growth rate.



8

1. Profitability

1.1 Basic Checks

In the past year VRSN was profitable.
VRSN had a positive operating cash flow in the past year.
VRSN had positive earnings in each of the past 5 years.
In the past 5 years VRSN always reported a positive cash flow from operatings.

1.2 Ratios

VRSN has a better Return On Assets (46.75%) than 100.00% of its industry peers.
VRSN's Return On Invested Capital of 143.06% is amongst the best of 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 13.14%.
The 3 year average ROIC (114.03%) for VRSN is below the current ROIC(143.06%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 46.75%
ROE N/A
ROIC 143.06%
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 (54.76%) than 100.00% of its industry peers.
VRSN's Profit Margin has improved in the last couple of years.
The Operating Margin of VRSN (67.01%) is better than 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 86.79%, VRSN belongs to the top of the industry, outperforming 97.62% 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 67.01%
PM (TTM) 54.76%
GM 86.79%
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%

3

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.
The number of shares outstanding for VRSN has been reduced compared to 5 years ago.
Compared to 1 year ago, VRSN has an improved debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of -4.67, we must say that VRSN is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of -4.67, VRSN is not doing good in the industry: 90.48% 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.
The Debt to FCF ratio of VRSN (2.22) is better than 71.43% of its industry peers.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 2.22
Altman-Z -4.67
ROIC/WACC13.11
WACC10.91%

2.3 Liquidity

VRSN has a Current Ratio of 0.83. 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 Current ratio value of 0.83, VRSN is not doing good in the industry: 82.14% of the companies in the same industry are doing better.
VRSN has a Quick Ratio of 0.83. 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's Quick ratio of 0.83 is on the low side compared to the rest of the industry. VRSN is outperformed by 79.76% of its industry peers.
Industry RankSector Rank
Current Ratio 0.83
Quick Ratio 0.83

5

3. Growth

3.1 Past

VRSN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.84%, 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.
Looking at the last year, VRSN shows a small growth in Revenue. The Revenue has grown by 4.79% 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)15.84%
EPS 3Y7.8%
EPS 5Y7.43%
EPS growth Q2Q12.94%
Revenue 1Y (TTM)4.79%
Revenue growth 3Y5.68%
Revenue growth 5Y4.21%
Revenue growth Q2Q3.03%

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 12.00% on average per year.
The Revenue is expected to grow by 6.29% on average over the next years.
EPS Next Y11.65%
EPS Next 2Y11.71%
EPS Next 3Y10.23%
EPS Next 5Y12%
Revenue Next Year5.45%
Revenue Next 2Y5.93%
Revenue Next 3Y4.86%
Revenue Next 5Y6.29%

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

4. Valuation

4.1 Price/Earnings Ratio

VRSN is valuated quite expensively with a Price/Earnings ratio of 26.18.
VRSN's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.48, VRSN is valued at the same level.
With a Price/Forward Earnings ratio of 23.45, VRSN is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VRSN indicates a somewhat cheap valuation: VRSN is cheaper than 60.71% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of VRSN to the average of the S&P500 Index (22.79), we can say VRSN is valued inline with the index average.
Industry RankSector Rank
PE 26.18
Fwd PE 23.45

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as VRSN.
64.29% of the companies in the same industry are more expensive than VRSN, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 23.67
EV/EBITDA 18.47

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)2.25
PEG (5Y)3.52
EPS Next 2Y11.71%
EPS Next 3Y10.23%

0

5. Dividend

5.1 Amount

VRSN does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

VERISIGN INC

NASDAQ:VRSN (3/28/2024, 8:00:02 PM)

After market: 189.51 0 (0%)

189.51

+0.41 (+0.22%)

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 Cap19.12B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield N/A
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 26.18
Fwd PE 23.45
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)2.25
PEG (5Y)3.52
Profitability
Industry RankSector Rank
ROA 46.75%
ROE N/A
ROCE
ROIC
ROICexc
ROICexgc
OM 67.01%
PM (TTM) 54.76%
GM 86.79%
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 Turnover0.85
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.83
Quick Ratio 0.83
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)15.84%
EPS 3Y7.8%
EPS 5Y
EPS growth Q2Q
EPS Next Y11.65%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.79%
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
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y