VERISIGN INC (VRSN) Stock Fundamental Analysis
USA - NASDAQ:VRSN - US92343E1029 - Common Stock
285.52 USD
-3.85 (-1.33%)
284.73 USD
-0.79 (-0.28%)
Taking everything into account, VRSN scores 4 out of 10 in our fundamental rating. VRSN was compared to 85 industry peers in the IT Services industry. VRSN scores excellent on profitability, but there are 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.
In the past year VRSN had a positive cash flow from operations.
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
The Return On Assets of VRSN (56.79%) is better 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's Operating Margin of 67.89% is amongst the best of 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.
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
VRSN has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
VRSN has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, VRSN has less shares outstanding
Compared to 1 year ago, VRSN has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of -4.17, we must say that VRSN is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of -4.17, VRSN is doing worse than 87.06% of the companies in the same industry.
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 72.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.88 | ||
| Altman-Z | -4.17 |
ROIC/WACC66.28
WACC8.87%
2.3 Liquidity
VRSN has a Current 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 Current ratio of 0.54. This is amonst the worse of the industry: VRSN underperforms 92.94% of its industry peers.
A Quick Ratio of 0.54 indicates that VRSN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.54, VRSN is doing worse than 92.94% of the companies in the same industry.
| 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.
The Revenue has been growing slightly by 4.59% in the past year.
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
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 34.07.
VRSN's Price/Earnings is on the same level as the industry average.
VRSN's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.30.
With a Price/Forward Earnings ratio of 29.46, VRSN can be considered very expensive at the moment.
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 22.73.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.07 | ||
| Fwd PE | 29.46 |
4.2 Price Multiples
VRSN's Enterprise Value to EBITDA ratio is in line with the industry average.
VRSN's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.07 | ||
| EV/EBITDA | 24.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VRSN does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of VRSN may justify a higher PE ratio.
VRSN's earnings are expected to grow with 12.13% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.54
PEG (5Y)3.99
EPS Next 2Y10.06%
EPS Next 3Y12.13%
5. Dividend
5.1 Amount
VRSN has a Yearly Dividend Yield of 1.06%.
Compared to an average industry Dividend Yield of 2.37, VRSN pays a better dividend. On top of this VRSN pays more dividend than 82.35% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, VRSN's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
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%
285.52
-3.85 (-1.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners82.22%
Inst Owner Change-1.2%
Ins Owners0.6%
Ins Owner Change-5.61%
Market Cap26.67B
Analysts82
Price Target317.48 (11.19%)
Short Float %2.51%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
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)9.3%
PT rev (3m)16.96%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.95%
EPS NY rev (1m)1.18%
EPS NY rev (3m)1.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.12%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.07 | ||
| Fwd PE | 29.46 | ||
| P/S | 16.69 | ||
| P/FCF | 28.07 | ||
| P/OCF | 27.25 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.95 |
EPS(TTM)8.38
EY2.93%
EPS(NY)9.69
Fwd EY3.39%
FCF(TTM)10.17
FCFY3.56%
OCF(TTM)10.48
OCFY3.67%
SpS17.11
BVpS-21.34
TBVpS-21.91
PEG (NY)2.54
PEG (5Y)3.99
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 | -4.17 |
F-Score7
WACC8.87%
ROIC/WACC66.28
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%