VeriSign (VRSN) Last Update 3/1/21
Related: EBAY GOOG AMZN AKAM
% of Stock Price
Revenue
Gross Profits
Free Cash Flow
VeriSign
STOCK PRICE
DIVISION
% of STOCK PRICE
Domain Names
100.0%
$220
Net Debt
2.5% $5
TOTAL
100%
$220
$214.20
Yours
Trefis Price
N/A
$194
Market
 
Top Drivers for Period
Key Drivers
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TREFIS Analysis


Trefis Report
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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

VeriSign Company

VALUATION HIGHLIGHTS

  1. Domain Names constitute 100% of the Trefis price estimate for VeriSign's stock.

WHAT HAS CHANGED?

Full-year 2020 Earnings

VeriSign reported net sales of $1.27 billion in FY '20, up from $1.23 billion in FY '19. Expenses grew in proportion to the growth in revenue, which saw operating margins come in stagnant at around 65%. An income tax benefit of $64 million, compared to a tax expense of $146 million last year, helped boost net income to $815 million, up significantly from $612 million in 2019. This helped boost EPS to $7.08 from $5.17.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of VeriSign's value that present opportunities for upside or downside to the current Trefis price estimate for VeriSign:

.com & .net domain names

  • Number of .com and .net domain registrations: With more and more businesses getting listed on the internet, .com and .net domain registrations have continued to grow from 127.2 million in 2013 to 165 million in 2020, and we expect it to reach to around 190 million through the forecast period. However, if the growth rate exceeds our expectations and the registration count reaches nearly 250 million, there could be an 10% upside to the Trefis price estimate for VeriSign's stock. On the other hand, the increase in domain name prices could reduce the demand for .com and .net domain names. There could be a downside of nearly 10% to the Trefis price estimate for VeriSign's stock if the registration count grows slower than expected and reaches only 175 million by the end of the Trefis forecast period.

For additional details, select a driver above or select a division from the interactive Trefis split for VeriSign at the top of the page.

BUSINESS SUMMARY

Historically, VeriSign had two main businesses - Domain Names & SSL and Authentication Services. The company sold its SSL and Authentication Services business to Symantec in May 2010 for $1.28 billion.

Domain Names:

Within this business, VeriSign controls the rights to the exclusive registry of .com and .net Internet domain names. VeriSign collects a fixed fee each time individuals or businesses register a new .com or .net domain name, or renew the registration of an existing domain name.

SOURCES OF VALUE

The source of value for the Domain Name division comes from the following:

Large Market for .com and .net Domain Names

The total domain name base for .com and .net stood at 165 million at the end of 2020. For 2021, we expect a total of around 172 million .com and .net domain names. VeriSign charges $7.70 for .com and .net currently.

Icann recently approved a 7% increase in pricing, this should reflect in the company's pricing policies in the coming quarters.

KEY TRENDS

Growth of the Internet

There were 252 million domain name registrations across all top level domains by the end of 2012. By the end of 2019, the number grew to just over 360 million domain names.

At the end of 2020, the total stood at 390 million.

Current internet penetration stands at about 50% of the total population. This figure is only going to grow with time.