Verisign Stock Has Outperformed The Broader Markets Since 2017- Here’s Why

+0.50%
Upside
202
Market
203
Trefis
VRSN: Verisign CA logo
VRSN
Verisign CA

Verisign Inc. (NASDAQ: VRSN) stock price has gained 61% from around $114 at 2017 end to $184 currently, primarily due to favorable changes in its P/S multiple. During this period, the company also witnessed an 18% rise in revenues which, despite an 8% rise in the outstanding share count, positively impacted the company’s revenue per share. Due to this, the company’s stock price has risen, and it has outperformed the S&P 500, which returned around 50% over the same period.

In our interactive dashboard, Why Verisign Stock Moved: VRSN Stock Has Gained 61% Since 2017, we break down the factors behind this move.

(A) VRSN’s Total Revenue has risen 18% from $1.2 billion in FY 2017 to $1.4 billion currently

  • Verisign’s total revenue has risen steadily from $1.2 billion in FY ’17 to $1.3 billion in FY ’21, and currently stands even higher at around $1.4 billion.
  • Verisign operates a diverse array of network infrastructure and is a leading domain name provider. The company also offers a wide range of security services.
  • The company operates in only one reportable segment and sales have been rising steadily and consistently every year over the past decade.
  • For additional details about VRSN’s revenues and comparison to peers, see Verisign (VRSN) Revenue Comparison
Relevant Articles
  1. Forecast Of The Day: Verisign’s Number Of Domain Registrations
  2. Verisign Stock Has Underperformed Despite Steady Sales Growth – Here’s Why
  3. Here’s Why Verisign Stock Has Underperformed The S&P Since 2020
  4. After Consistently Underperforming The S&P, Verisign Stock Looks Set To Bounce Back
  5. Can Verisign Stock Continue Beating The Market?
  6. You Should Read This Before Buying NetApp Stock

(B) Revenue per share (RPS) increased 9% from $11.62 in FY 2017 to $12.64 currently

  • VRSN’s revenue rose from $1.2 billion in FY 2017 to $1.4 billion currently, and the outstanding share count rose from 100.3 million in FY 20217 to around 108.6 million currently.
  • Due to this, RPS has risen around 9% from $11.62 in FY ’17 to $12.64 currently.

(C) Price-To-Sales (P/S) multiple for VRSN rose initially from 10.3x in 2017 to 20x by 2021 end, but has pulled back to 14.6x currently, still higher than its 2017 level

  • VRSN’s P/S multiple rose strongly to around 20x by late 2021, on the back of rising investor expectations surrounding increased demand for its products, leading to a rise in the company’s sales.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 14.6x.
  • For additional details about the company stock returns and comparison to peers, see Verisign (VRSN) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Sep 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 VRSN Return 3% -26% 146%
 S&P 500 Return 1% -16% 79%
 Trefis Multi-Strategy Portfolio 0% -15% 235%

[1] Month-to-date and year-to-date as of 9/8/2022
[2] Cumulative total returns since the end of 2016

 

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates