VERISIGN INC (VRSN) Stock Fundamental Analysis
NASDAQ:VRSN - Nasdaq - US92343E1029 - Common Stock - Currency: USD
Taking everything into account, VRSN scores 4 out of 10 in our fundamental rating. VRSN was compared to 82 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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year VRSN was profitable.
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
VRSN has a better Return On Assets (54.63%) than 100.00% of its industry peers.
With an excellent Return On Invested Capital value of 533.63%, VRSN belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 54.63% | ||
| ROE | N/A | ||
| ROIC | 533.64% |
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 (50.20%) is better than 100.00% of its industry peers.
VRSN's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 67.95%, VRSN belongs to the top 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.
With an excellent Gross Margin value of 87.83%, VRSN belongs to the best of the industry, outperforming 98.78% 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 | 67.95% | ||
| PM (TTM) | 50.2% | ||
| GM | 87.83% |
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.
VRSN has less shares outstanding than it did 1 year ago.
The number of shares outstanding for VRSN has been reduced compared to 5 years ago.
The debt/assets ratio for VRSN is higher compared to a year ago.
2.2 Solvency
VRSN has an Altman-Z score of -4.22. This is a bad value and indicates that VRSN is not financially healthy and even has some risk of bankruptcy.
VRSN's Altman-Z score of -4.22 is on the low side compared to the rest of the industry. VRSN is outperformed by 90.24% of its industry peers.
The Debt to FCF ratio of VRSN is 1.97, which is an excellent value as it means it would take VRSN, only 1.97 years of fcf income to pay off all of its debts.
VRSN has a better Debt to FCF ratio (1.97) than 71.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.97 | ||
| Altman-Z | -4.22 |
ROIC/WACC57.57
WACC9.27%
2.3 Liquidity
VRSN has a Current Ratio of 0.56. 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 0.56. This is amonst the worse of the industry: VRSN underperforms 92.68% of its industry peers.
A Quick Ratio of 0.56 indicates that VRSN may have some problems paying its short term obligations.
VRSN has a Quick ratio of 0.56. This is amonst the worse of the industry: VRSN underperforms 92.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.56 |
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.
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.
VRSN shows a small growth in Revenue. In the last year, the Revenue has grown by 4.31%.
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)9.11%
EPS 3Y13.17%
EPS 5Y8.54%
EPS Q2Q%9.95%
Revenue 1Y (TTM)4.31%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%5.89%
3.2 Future
The Earnings Per Share is expected to grow by 13.72% on average over the next years. This is quite good.
Based on estimates for the next years, VRSN will show a small growth in Revenue. The Revenue will grow by 6.75% on average per year.
EPS Next Y12.08%
EPS Next 2Y8.69%
EPS Next 3Y10.56%
EPS Next 5Y13.73%
Revenue Next Year5.54%
Revenue Next 2Y3.71%
Revenue Next 3Y5.43%
Revenue Next 5Y6.75%
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
VRSN is valuated quite expensively with a Price/Earnings ratio of 36.49.
Compared to the rest of the industry, the Price/Earnings ratio of VRSN is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.04. VRSN is valued slightly more expensive when compared to this.
With a Price/Forward Earnings ratio of 32.35, VRSN can be considered very expensive at the moment.
VRSN's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of VRSN to the average of the S&P500 Index (37.64), we can say VRSN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.49 | ||
| Fwd PE | 32.35 |
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 | 31.68 | ||
| EV/EBITDA | 25.29 |
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.
VRSN has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.02
PEG (5Y)4.27
EPS Next 2Y8.69%
EPS Next 3Y10.56%
5. Dividend
5.1 Amount
VRSN has a Yearly Dividend Yield of 1.06%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.39, VRSN pays a better dividend. On top of this VRSN pays more dividend than 80.49% of the companies listed 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 | 1.06% |
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
DP0%
EPS Next 2Y8.69%
EPS Next 3Y10.56%
305.79
+19.12 (+6.67%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners82.53%
Inst Owner Change-1.37%
Ins Owners0.64%
Ins Owner Change0.69%
Market Cap28.71B
Analysts80
Price Target290.48 (-5.01%)
Short Float %2.3%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.19%
Min EPS beat(2)-2.26%
Max EPS beat(2)-2.11%
EPS beat(4)2
Avg EPS beat(4)-0.37%
Min EPS beat(4)-2.26%
Max EPS beat(4)1.94%
EPS beat(8)5
Avg EPS beat(8)0.02%
EPS beat(12)7
Avg EPS beat(12)0.24%
EPS beat(16)9
Avg EPS beat(16)-0.02%
Revenue beat(2)0
Avg Revenue beat(2)-1.84%
Min Revenue beat(2)-1.85%
Max Revenue beat(2)-1.84%
Revenue beat(4)0
Avg Revenue beat(4)-1.79%
Min Revenue beat(4)-1.85%
Max Revenue beat(4)-1.63%
Revenue beat(8)0
Avg Revenue beat(8)-1.82%
Revenue beat(12)0
Avg Revenue beat(12)-1.72%
Revenue beat(16)0
Avg Revenue beat(16)-1.65%
PT rev (1m)7.01%
PT rev (3m)16.86%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)1.27%
EPS NY rev (1m)-0.09%
EPS NY rev (3m)1.01%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)1.44%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)1.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.49 | ||
| Fwd PE | 32.35 | ||
| P/S | 18.23 | ||
| P/FCF | 31.68 | ||
| P/OCF | 30.66 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 25.29 |
EPS(TTM)8.38
EY2.74%
EPS(NY)9.45
Fwd EY3.09%
FCF(TTM)9.65
FCFY3.16%
OCF(TTM)9.97
OCFY3.26%
SpS16.78
BVpS-21.05
TBVpS-21.61
PEG (NY)3.02
PEG (5Y)4.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 54.63% | ||
| ROE | N/A | ||
| ROCE | 664.49% | ||
| ROIC | 533.64% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 67.95% | ||
| PM (TTM) | 50.2% | ||
| GM | 87.83% | ||
| FCFM | 57.54% |
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 Turnover1.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.97 | ||
| Debt/EBITDA | 1.61 | ||
| Cap/Depr | 83.61% | ||
| Cap/Sales | 1.91% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.65% | ||
| Profit Quality | 114.62% | ||
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | -4.22 |
F-Score7
WACC9.27%
ROIC/WACC57.57
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 Y12.08%
EPS Next 2Y8.69%
EPS Next 3Y10.56%
EPS Next 5Y13.73%
Revenue 1Y (TTM)4.31%
Revenue growth 3Y5.47%
Revenue growth 5Y4.8%
Sales Q2Q%5.89%
Revenue Next Year5.54%
Revenue Next 2Y3.71%
Revenue Next 3Y5.43%
Revenue Next 5Y6.75%
EBIT growth 1Y5.14%
EBIT growth 3Y6.88%
EBIT growth 5Y5.59%
EBIT Next Year12.59%
EBIT Next 3Y7.27%
EBIT Next 5Y8.55%
FCF growth 1Y5.84%
FCF growth 3Y5.06%
FCF growth 5Y4.15%
OCF growth 1Y6.07%
OCF growth 3Y3.79%
OCF growth 5Y3.67%