تحليلات المنتج الاختيارية
بإذنك، نستخدم تحليلات محدودة تراعي الخصوصية لفهم مسارات البحث الفعالة. لا نستخدم أدوات تتبع إعلانية أو تسجيل الجلسات. يمكنك تغيير هذا الخيار في التفضيلات. اقرأ سياسة الخصوصية.
The most significant upside opportunity is the commercial rollout of the.web registry coupled with AI-driven digital identity creation.
Regulatory price freeze or denial of contractual 7% wholesale price increases by ICANN or the U.S.
We rate VeriSign Sell, as the market price stands well above intrinsic business value despite the company's strong regulatory monopoly.3
The house rating for VeriSign is Sell. For an ordinary investor, this rating means the stock is substantially overvalued relative to its fundamental cash-generating power, and investors should avoid opening new positions or consider reallocating capital out of existing holdings into opportunities with more favorable risk-adjusted returns.3
On the report date of October 6, 2026, VeriSign traded at $293.10 per share. Against our valuation range, the stock trades at an implied return of -20.43% to our Fair value of $233.22, representing a 25.68% price premium above the company's fundamental worth. The report-date price also exceeds our Potential value estimate of $273.89, which represents the upper boundary of our valuation range under accelerated growth assumptions.
The primary risk that could further impair shareholder value is regulatory intervention capping or freezing wholesale domain price increases. If ICANN or the United States Department of Commerce restricts the contractual 7% annual price increases on.com renewals, top-line revenue growth would stall to volume-only rates below 3.0%, while rising server equipment expenses ($55M to $65M guided in FY2026) would compress cash conversion and free cash flow. Investors would observe this downside through formal regulatory filings capping price escalation, decelerating quarterly revenue growth below 3%, and a slowdown in share repurchases.4
Conversely, the principal driver that could support business performance is the commercial rollout of the.web registry alongside demand generated by artificial intelligence tools. VeriSign has full wholesale pricing flexibility on.web and processes registrations with near-zero incremental operational costs. As AI simplifies website and identity creation, net registrations can expand, flowing directly into high-margin revenue and operating margins above 67.7%. This expanding cash flow funds the company's $1.5 billion share repurchase authorization, reducing share count by over 3% annually and boosting per-share earnings toward our Potential value of $273.89, though this upside remains secondary to the downside risk at current market pricing.46
VeriSign possesses exclusive bilateral agreements with ICANN and the U.S. Department of Commerce to operate.com and.net, granting legal exclusivity and contractual wholesale pricing power.4
An operating margin of 67.7% and minimal maintenance capex allow VeriSign to convert nearly 100% of net earnings into free cash flow to support continuous share repurchases.56
Commercial launch of.web provides unconstrained wholesale pricing freedom without contractual price caps, creating an incremental organic growth driver.4
We rate VeriSign Sell because the stock's market price of $293.10 reflects a 25.68% premium over its Fair value of $233.22, leaving investors exposed to valuation compression and regulatory pricing constraints.3
VeriSign Inc. provides domain name registry services and internet infrastructure that enable digital navigation across the global internet. The company operates the authoritative registries for the.com,.net, and.name generic top-level domains under long-term registry agreements with the Internet Corporation for Assigned Names and Numbers (ICANN), as well as a Cooperative Agreement with the United States Department of Commerce for.com. It also manages the.cc country-code domain under an agreement with the Cocos (Keeling) Islands and provides back-end technical registry services for the.edu domain.
The company's core operations infrastructure includes secure primary data centers located in Dulles and Ashburn, Virginia, and New Castle, Delaware, complemented by more than 200 points of presence deployed across the globe. VeriSign's domain name servers handle Domain Name System (DNS) resolution by routing queries to authoritative servers, processing hundreds of billions of transactions daily with continuous, uninterrupted availability for global internet users and retail domain registrars.
In a comprehensive stress test scenario, VeriSign's core contractual growth engine is compromised. If regulatory authorities freeze programmatic wholesale price increases on.com, revenue growth decelerates from 5.85% guided in FY2026 toward 0-1%. Concurrently, server and memory inflation forces capex beyond the guided $55M-$65M range, compressing operating margins below 64.7%. With free cash flow diminished and refinancing costs rising from pre-tax debt yields of 5.85%, share buybacks decelerate, driving fair value down toward the low valuation boundary of $201.48.
The bear case reflects a severe downside outcome driven by regulatory intervention on registry concessions, customer concentration disruption, or persistent hardware cost inflation. Outside the dedicated risk assessment, this scenario serves to establish the boundaries of operating vulnerability. Downside drivers include potential price caps imposed during concession renewals, softening renewal retention among recent registrant cohorts, and elevated data center replacement outlays. This trajectory would be confirmed if regulatory authorities freeze contractual pricing adjustments or if registrar channel partners compress retail domain marketing over the coming fiscal periods.
Under bilateral agreements with ICANN and the Department of Commerce, VeriSign's pricing power is subject to periodic regulatory review. If ICANN or antitrust regulators freeze contractual 7% price increases or cap renewal prices, top-line growth collapses to volume-only rates (0-1%), dragging EPS growth down to bear-case levels of 5-7% and compressing the multiple to peer median 16.5x.4
التطورات الخمسة التي قد تضعف أطروحتنا الاستثمارية.
Contractual pricing power fails to offset domain volume attrition, forcing downward revision of medium-term revenue CAGR.
الحالي:5.85% (FY2026 guidance midpoint)
تنبيه إذا
VeriSign operates one of the most durable economic moats in global technology, derived from its exclusive regulatory concessions to operate the authoritative registries for the.com and.net top-level domains. Governed by bilateral agreements with ICANN and the US Department of Commerce, VeriSign possesses the contractual right to increase wholesale prices by up to 7% annually in four out of six years, endowing the business with programmatic pricing power that is entirely insulated from competitive bidding. This statutory monopoly is complemented by the commercialization of the.web registry, where VeriSign holds complete wholesale pricing flexibility subject only to a standard six-month notice requirement.
Switching costs embedded in the global domain name system reinforce this regulatory fortress. A business or content creator's domain name encapsulates its digital identity, customer trust, and web routing infrastructure. Abandoning or migrating an established domain imposes catastrophic operational and brand friction, ensuring stable baseline renewal rates across economic cycles. Furthermore, VeriSign distributes wholesale registrations through an accredited network of global retail registrars. Although its largest registrar customer accounts for 31% of revenue, end-user registrants own their domain names and can seamlessly transfer them across registrars, neutralizing single-partner disintermediation risk and channel monopsony.
The technical architecture of the domain name system generates substantial efficient scale advantages. VeriSign processes tens of billions of DNS queries daily across its globally distributed constellation of resolution sites with near-zero marginal cost per transaction. In FY2025, the company generated $1,121.0M in operating income on $1,656.6M in revenue, achieving an exceptional 67.67% operating margin. Operating on negative invested capital (-$366M in FY2025), economic profit dwarfs the computed cost of capital (WACC of 8.61% and Ke moderate of 8.96%). Supported by a 15-year competitive advantage horizon, VeriSign's wide economic moat remains firmly intact.
Operating income of $1,121.0M in FY2025 on negative invested capital (-$366M in FY2025) demonstrates returns on capital far exceeding computed WACC of 8.61% and cost of equity of 8.96%, justifying a wide moat rating and 15-year horizon.26
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
The highlighted cell is Fair value when every assumption sits at its base level ($233.22). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $899.0M after modeled reinvestment of $29.7M, with terminal value at 84.2% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
The base case carries an assigned probability of 60.0% and establishes a target of $233.22, yielding an implied return of -20.4% relative to $293.10. This path assumes contractual wholesale price increases on the core registry continue without regulatory disruption, flowing into revenue over the standard multi-year recognition cycle. Operating margins remain steady near current levels, and systematic share buybacks continue to contract the share count. This case would be disconfirmed if regulatory authorities cap renewal prices or if first-time renewal rates drop persistently through FY2027.
An upside operational surprise would demonstrate that commercialization of the new namespace is delivering incremental high-margin revenue, but shares trade at $293.10 which sits well above Fair value of $233.22, limiting total upside to Potential value of $273.89.
In-line financial execution affirms the durability of the Concession model, yet valuation at $293.10 leaves no margin of safety relative to Fair value of $233.22.
A revenue or margin miss would indicate that pricing adjustments cannot offset volume attrition or that infrastructure inflation is permanently elevating capital intensity, destroying the thesis for multiple support above Fair value of $233.22.
Earnings quality is anchored by strong operating cash conversion supported by negative working capital dynamics, as multi-year domain registration fees are collected upfront while maintenance requirements remain low. However, reported earnings face a near-term reinvestment headwind from server and memory equipment inflation, which forces accelerated capital outlays and temporarily widens the gap between operating profit and realized free cash flow.
Consensus revenue and earnings projections have remained unchanged over recent revision periods, tracking closely with the midpoints of full-year management guidance. Sell-side analysts have factored in programmatic wholesale price increases on the core registry while maintaining neutral assumptions regarding the initial revenue contribution from the newly launched namespace.
Domain base expansion and renewal retention determine organic revenue stability before pricing adjustments; a deceleration in first-time renewals signals post-formation registrant churn.
VeriSign exhibits extraordinary cash generation dynamics rooted in its asset-light concession model. In FY2025, operating cash flow reached $1,091.1M against capital expenditures of $22.8M, producing $1,068.3M of free cash flow. Free cash flow converted at 129.4% of GAAP net income of $825.7M, propelled by favorable negative working capital as multi-year domain registration fees are collected upfront. For FY2026, management guidance projects capex rising to $55M-$65M due to the strategic pull-forward of server and memory equipment, which will temporarily moderate free cash flow conversion toward 90-95% before stabilizing.34
VeriSign operates with negative invested capital (-$366M in FY2025) because cumulative share repurchases exceed retained earnings, while operating income reached $1,121.0M. Because the technical DNS infrastructure requires minimal incremental capital, economic profit per dollar of operating asset is exceptionally high and will remain stable across the forecast horizon.
ROIC significantly exceeds computed WACC of 8.61% and cost of equity of 8.96%.
FY2025 operating income reached $1,121.0M on $1,656.6M , yielding a 67.67% .
| الإيرادات | 434,600,000 US$ |
|---|---|
| تكلفة الإيرادات | 50,000,000 US$ |
| إجمالي الربح | 384,600,000 US$ |
| المصروفات التشغيلية | 88,300,000 US$ |
| الدخل التشغيلي | 296,300,000 US$ |
| البنود غير التشغيلية والضرائب | -79,800,000 US$ |
| صافي الدخل | 216,500,000 US$ |
| إجمالي الأصول | 1,325,900,000 US$ |
|---|---|
| النقد | 307,900,000 US$ |
| الأصول المتداولة | 652,500,000 US$ |
| إجمالي الالتزامات | 3,480,100,000 US$ |
| الالتزامات المتداولة | 1,333,100,000 US$ |
| عجز حقوق المساهمين | 2,154,200,000 US$ |
| صافي الدخل | 825,700,000 US$ |
|---|---|
| التدفق النقدي التشغيلي الداخل | 1,091,100,000 US$ |
| الإهلاك والإطفاء | 31,200,000 US$ |
| التعويض القائم على الأسهم | 69,700,000 US$ |
| تعديلات تشغيلية أخرى | 164,500,000 US$ |
| التدفق النقدي التشغيلي | 1,091,100,000 US$ |
| النقد المتاح | 1,412,300,000 US$ |
| النقد في بداية الفترة | 212,100,000 US$ |
| التدفق الاستثماري الداخل | 109,100,000 US$ |
| التدفق التمويلي الخارج | 1,102,800,000 US$ |
| إعادة شراء الأسهم | 881,600,000 US$ |
| أرباح الأسهم المدفوعة | 215,200,000 US$ |
| صافي سداد الدين | 6,700,000 US$ |
| النقد في نهاية الفترة | 309,500,000 US$ |
| التدفق النقدي الاستثماري | 109,100,000 US$ |
| التدفق النقدي التمويلي | -1,102,800,000 US$ |
المصدر: SEC EDGAR · تاريخ الإيداع 2026-02-05 · SEC EDGAR
| الإيرادات حسب المنطقة | الإيرادات | الحصة | على أساس سنوي |
|---|---|---|---|
| United States | 1.1 مليار US$ | 66% | 5.6% |
| EMEA | 279.4 مليون US$ | 16.9% | 11.9% |
| Asia Pacific | 184.6 مليون US$ | 11.1% | 5.1% |
| Other Geographical Areas | 99.5 مليون US$ | 6% | 3% |
البيانات المالية في نقطة زمنية المستخدمة في تحليل 2026-10-07.
| الفترة | الإيرادات | EBITDA | صافي الدخل | التدفق النقدي التشغيلي | التدفق النقدي الحر | النفقات الرأسمالية | الإهلاك والإطفاء | التعويض القائم على الأسهم | إعادة شراء الأسهم | أرباح الأسهم المدفوعة | صافي إصدار الدين | التدفق النقدي الاستثماري | التدفق النقدي التمويلي | النقد في بداية الفترة | النقد في نهاية الفترة | النقد والاستثمارات | إجمالي الديون | الهامش التشغيلي | ROIC | WACC | فارق ROIC−WACC |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | 1.1 مليار US$ | 754.9 مليون US$ | 440.6 مليون US$ | 693 مليون US$ | 666.4 مليون US$ | 26.6 مليون US$ | 58.2 مليون US$ | 50 مليون US$ | 662.5 مليون US$ | 0 US$ | — | -42.7 مليون US$ | -648.8 مليون US$ | — | 241.6 مليون US$ | 1.8 مليار US$ | 1.9 مليار US$ | 60.1% | — | 6.3% | — |
| 2017-12-31 | 1.2 مليار US$ | 785.2 مليون US$ | 457.2 مليون US$ | 702.8 مليون US$ | 653.3 مليون US$ | 49.5 مليون US$ | 49.9 مليون US$ | 52.9 مليون US$ | 621.2 مليون US$ | 0 US$ | — | -405.4 مليون US$ | -65.1 مليون US$ | 241.6 مليون US$ | 475.1 مليون US$ | 2.4 مليار US$ | 2.4 مليار US$ | 60.7% | — | 5.8% | — |
| 2018-12-31 | 1.2 مليار US$ | 892.7 مليون US$ | 582.5 مليون US$ | 697.8 مليون US$ | 660.8 مليون US$ | 37 مليون US$ | 48.4 مليون US$ | 52.5 مليون US$ | 638.2 مليون US$ | — | — | 1.1 مليار US$ | -1.9 مليار US$ | 475.1 مليون US$ | 366.8 مليون US$ | 1.3 مليار US$ | 1.8 مليار US$ | 63.2% | — | 6.1% | — |
| 2019-12-31 | 1.2 مليار US$ | 895.7 مليون US$ | 612.3 مليون US$ | 753.9 مليون US$ | 713.6 مليون US$ | 40.3 مليون US$ | 46.3 مليون US$ | 50.6 مليون US$ | 782.6 مليون US$ | — | — | 167.2 مليون US$ | -770.3 مليون US$ | 366.8 مليون US$ | 517.6 مليون US$ | 1.2 مليار US$ | 1.8 مليار US$ | 65.5% | — | 5.8% | — |
| 2020-12-31 | 1.3 مليار US$ | 886.7 مليون US$ | 814.9 مليون US$ | 730.2 مليون US$ | 686.8 مليون US$ | 43.4 مليون US$ | 46.4 مليون US$ | 48.2 مليون US$ | 777.5 مليون US$ | — | — | -72.3 مليون US$ | -764.9 مليون US$ | 517.6 مليون US$ | 410.6 مليون US$ | 1.2 مليار US$ | 1.8 مليار US$ | 65.1% | — | 4.2% | — |
| 2021-12-31 | 1.3 مليار US$ | 913.4 مليون US$ | 784.8 مليون US$ | 807.2 مليون US$ | 754.2 مليون US$ | 53 مليون US$ | 47.9 مليون US$ | 53.4 مليون US$ | 722.6 مليون US$ | 12.4 مليون US$ | — | -269.2 مليون US$ | -719.1 مليون US$ | 410.6 مليون US$ | 228.8 مليون US$ | 1.2 مليار US$ | 1.8 مليار US$ | 65.3% | — | 4.7% | — |
| 2022-12-31 | 1.4 مليار US$ | 1 مليار US$ | 673.8 مليون US$ | 831.1 مليون US$ | 803.7 مليون US$ | 27.4 مليون US$ | 46.9 مليون US$ | 58.6 مليون US$ | 1 مليار US$ | — | 0 US$ | 355.7 مليون US$ | -1 مليار US$ | 228.8 مليون US$ | 379 مليون US$ | 980.4 مليون US$ | 1.8 مليار US$ | 66.2% | — | 7.3% | — |
| 2023-12-31 | 1.5 مليار US$ | 1.1 مليار US$ | 817.6 مليون US$ | 853.8 مليون US$ | 808 مليون US$ | 45.8 مليون US$ | 44.1 مليون US$ | 59.7 مليون US$ | 901.4 مليون US$ | 0 US$ | 0 US$ | -97.4 مليون US$ | -889.8 مليون US$ | 379 مليون US$ | 245.5 مليون US$ | 926.4 مليون US$ | 1.8 مليار US$ | 67.0% | — | 7.4% | — |
| 2024-12-31 | 1.6 مليار US$ | 1.1 مليار US$ | 785.7 مليون US$ | 902.6 مليون US$ | 874.5 مليون US$ | 28.1 مليون US$ | 36.9 مليون US$ | 61.1 مليون US$ | 1.2 مليار US$ | 0 US$ | 0 US$ | 286.3 مليون US$ | -1.2 مليار US$ | 245.5 مليون US$ | 212.1 مليون US$ | 599.9 مليون US$ | 1.8 مليار US$ | 67.9% | — | 7.8% | — |
| 2025-12-31 | 1.7 مليار US$ | 1.2 مليار US$ | 825.7 مليون US$ | 1.1 مليار US$ | 1.1 مليار US$ | 22.8 مليون US$ | 31.2 مليون US$ | 69.7 مليون US$ | 881.6 مليون US$ | 215.2 مليون US$ | -6.7 مليون US$ | 109.1 مليون US$ | -1.1 مليار US$ | 212.1 مليون US$ | 309.5 مليون US$ | 580.5 مليون US$ | 1.8 مليار US$ | 67.7% | — | 7.6% | — |
VeriSign Inc. (VRSN) trades at 27.0x forward earnings against a peer median of 16.5x. Its EV/EBITDA of 23.4x compares with a peer median of 16.4x. The comparison uses 4 peers: Corpay Inc., GoDaddy Inc., NetApp Inc. and Synopsys Inc., as of 2026-10-06 to 2026-10-07.
Software and IT services industry benchmarks demonstrate an aggressive capital spending phase, with industry capex-to-revenue at 17.8% and capex-to-depreciation at 2.45. In contrast, VeriSign's asset-light registry model operated at capex-to-revenue of 1.38% ($22.8M capex on $1,656.6M revenue) in FY2025, though management guided FY2026 capex upward to $55M-$65M (3.1%-3.7% of revenue) to pull forward server and memory procurement amidst hardware inflation.46
In an industry upcycle, entity creation surges as businesses and creators launch online presences. AI tooling lowers the barrier to website generation, expanding net domain registrations. Contractual 7% wholesale price increases on.com flow through over two-year cycles, while commercialization of the.web namespace unlocks unconstrained wholesale pricing discretion, driving top-line revenue growth toward 8-10% and expanding operating margins to 69-70%.
In an industry downcycle, domain intake slows as speculative registrations subside and first-time domain renewal rates soften. Channel distribution partners face retail margin pressure, prompting marketing cutbacks. Concurrently, regulatory authorities scrutinize registry concession terms, freezing wholesale price adjustments. Top-line revenue growth drops to 0-2%, operating margins compress toward 63-64% under server hardware inflation, and reduced free cash flow slows share buybacks.
VeriSign occupies an upstream concession bottleneck at the core of the global internet domain name system. Operating as the sole authoritative registry for.com and.net, it is structurally insulated from retail pricing battles and customer churn that affect downstream registrars like GoDaddy (operating margin 24.68%). VeriSign's 67.67% operating margin dwarfs the industry average operating margin of 33.2%, cementing its monopolistic positioning.6
Under a Sell rating with shares priced at $293.10 as of October 6, 2026, trading at a 25.7% premium over Fair value of $233.22, no portfolio allocation is warranted. High conviction in the Sell rating is supported by negative implied expected returns (-20.4%) and an asymmetric risk profile where even the bull case valuation ($273.89) remains below October 6, 2026 levels.3
Risk management mandates complete discipline against holding or accumulating shares at $293.10. With a forward P/E of 26.95x trading at an extreme premium over peer medians (peer median forward P/E is 16.52x, with CPAY at 12.91x and GDDY at 9.04x), the stock offers negative implied returns (-20.4%) to Fair value of $233.22. Highly leveraged balance sheets ($1,798M total debt vs $307.9M cash) and upcoming refinancing risks at 5.85% pre-tax cost of debt make VRSN vulnerable to sharp downward re-rating on any regulatory or channel disruption.
VeriSign trades at 26.95x forward earnings and a 25.68% premium to our Fair value of $233.22, offering negative margin of safety and a -20.43% implied return.3
Top-line revenue growth is guided to 5.85% in FY2026 ($1.75B to $1.76B) and consensus projects 9.74% in FY2027, which is insufficient to justify a premium 26.95x forward multiple in a slowing domain registration environment.14
Capital return is conducted via buybacks rather than high dividend yield, but balance sheet leverage ($1,798M debt vs $307.9M cash) and rising pre-tax debt costs of 5.85% constrain buyback capacity at inflated share prices.236
We recommend selling or trimming VeriSign shares as the October 6, 2026 share price of $293.10 stands 25.68% above our Fair value of $233.22, offering an unfavorable risk-reward profile with an implied return of -20.43%.3
While VeriSign's wide economic moat and 67.7% operating margins remain formidable, current valuation multiples (26.95x forward P/E) fully discount prospective growth and leave zero margin of safety against regulatory price freezes or debt refinancing pressures.
دوّن أطروحتك الاستثمارية وحجم مركزك وأسئلة المتابعة. تبقى على هذا الجهاز، ولا يراها أحد سواك.
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
VeriSign trades at a forward P/E of 26.95x and terminal multiple is authored at 21.0x. If customer concentration risk materializes at its largest registrar customer (31% of revenue) or first-time renewal rates continue to tick down, the market will de-rate VRSN's terminal multiple by 20% toward peer median forward P/E of 16.52x (peers CPAY at 12.91x, GDDY at 9.04x).347
Management guided FY2026 capex to jump from $22.8M in FY2025 to $55M-$65M due to sharp price increases in server and memory markets. Executive leadership stated the company will acquire necessary equipment 'regardless of market prices'. If sustained hardware inflation and.web operational ramp costs persist, operating margin will erode by 300 bps below historical 67.7%.46
VeriSign carries total debt of $1,798M ($2,340.3M per market data) against cash of $307.9M, resulting in negative book equity and substantial balance sheet leverage. With pre-tax cost of debt at 5.85% and risk-free rate at 5.31%, refinancing maturing notes in an elevated rate environment increases credit risk and pushes required equity return up by 100 bps from computed Ke moderate of 8.96%.236
Channel disintermediation or registrar distress leading to friction in domain registration and renewal intake.
الحالي:31.0% (FY2025)
تنبيه إذا<= 20.0%
Hardware inflation or regulatory overhead eroding platform operating leverage and cash conversion.
الحالي:67.67% (FY2025)
تنبيه إذا< 62.0%
Data center hardware price increases exceeding temporary pull-forward expectations, impairing free cash flow.
الحالي:$22.8M (FY2025) / $55M-$65M (FY2026 guidance)
تنبيه إذا> $75.0M
Refinancing $1,798M debt in an elevated rate environment raises interest burdens, compressing cash available for share buybacks.
الحالي:5.85% (as of 2026-10-07)
تنبيه إذا> 7.00%
| medium |
| 12-18 months |
| Domain registrants own their domains and can transfer renewals to alternative ICANN-accredited registrars if a specific partner experiences operational distress.7 |
| Server and memory hardware price inflation elevating FY2026 capital expenditures to $55M-$65M and creating a temporary drag on free cash flow. | low | 6-12 months | Management proactively pulls forward hardware purchases to avoid upcoming price increases, with total capex remaining below 4% of revenue.4 |
| Alternative naming protocols, decentralized blockchain domains, or social identity systems gradually eroding demand for traditional.com/.net registrations. | low | 24-36 months | ICANN-governed DNS infrastructure provides unmatched global trust, resolution speed, and legal protection that alternative naming systems cannot replicate.4 |
Under the moderate discount rate, 40.00 US$ comes from forecast-period earnings and 176 US$ from the long-term value, totaling 216 US$.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Solve for the growth rate that makes the model value equal the report-date share price.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
The bull case carries an assigned probability of 20.0% with a target of $273.89, yielding an implied return of -6.6% from $293.10. This scenario envisions an acceleration in digital identity demand driven by artificial intelligence tooling, alongside strong commercial adoption of the new top-level domain where wholesale pricing is completely unconstrained by regulatory price caps. Operating margins expand toward Potential value of $273.89 as incremental domain volume generates near-zero marginal cost. This outcome would be disconfirmed if registrar channel partners fail to market the new namespace effectively or if domain creation velocity slows by the end of FY2027.
Contractual price increases on the core registry require multiple quarters to fully recognize across multi-year registrations, driving gross profit and operating leverage.
Unconstrained wholesale pricing discretion on the new namespace represents the primary organic growth catalyst beyond regulated core contracts.
Accelerating server and memory hardware replacement costs increase cash reinvestment and challenge historical free cash flow conversion rates.
High revenue concentration in the primary retail distribution channel leaves domain intake vulnerable to partner operational friction or retail pricing shifts.
| $2.06B |
| $2.19B |
| $2.32B |
| Revenue growth | 5.9% | 9.7% | 7.0% | 6.5% | 6.0% |
| Operating margin | 67.9% | 68.2% | 68.4% | 68.5% | 68.5% |
| Operating income | $1.19B | $1.31B | $1.41B | $1.50B | $1.59B |
| Tax rate | 22.0% | 22.0% | 22.0% | 22.0% | 22.0% |
| NOPAT | $928.69M | $1.02B | $1.10B | $1.17B | $1.24B |
| Reinvestment | $29.72M | $18.43M | $19.77M | $21.09M | $22.35M |
| Reinvestment rate (of NOPAT) | 3.2% | 1.8% | 1.8% | 1.8% | 1.8% |
| Free cash flow to firm | $898.98M | $1.01B | $1.08B | $1.15B | $1.22B |
| Terminal growth | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% |
Management pursues an aggressive capital return strategy that directs virtually all operating cash flow toward share repurchases. Over the trailing 12 months, VeriSign returned $1.17B via repurchases and dividends. The Board expanded the repurchase authorization by $884M to $1.5B with no expiration, continuing a multi-year program that contracted diluted share count from 93.8M in FY2025 to 90.4M shares outstanding as of October 2026. However, continuous debt-funded share retirements have resulted in total debt of $1,798M ($2,340.3M per market data) against cash of $307.9M, creating negative book equity. With a pre-tax cost of debt at 5.85%, debt service costs will require a greater share of operating cash flow upon refinancing.
FY2025 free cash flow was $1,068.3M compared to net income of $825.7M, representing a 129.4% cash conversion rate.
Upfront cash collection on multi-year domain registrations provides surplus liquidity, though FY2026 capex guidance of $55M-$65M will temporarily trim near-term conversion.
Diluted shares fell from 93.8M in FY2025 to 90.4M shares, while total debt stands at $1,798M.
Annual share count contraction of 3.0%-3.6% compounds EPS well above revenue growth, but refinancing notes at pre-tax debt costs of 5.85% will absorb cash flow and moderate future buybacks.
| الهامش |
|---|
| VRSN | VeriSign Inc. | $26.5B | 27.0x | 15.5x | 23.4x | — | — |
| CPAY | Corpay Inc. | $26.7B | 12.9x | 5.3x | 12.4x | 29.2% | 46.9% |
| GDDY | GoDaddy Inc. | $12.6B | 9.0x | 2.5x | 12.0x | 398.2% | 24.7% |
| NTAP | NetApp Inc. | $44.0B | 20.1x | 5.9x | 20.5x | 114.8% | 26.7% |
| SNPS | Synopsys Inc. | $93.6B | 26.3x | 9.9x | 48.6x | 3.7% | 14.5% |
| Alternative Namespace Proliferation and Digital Identity Decentralization | neutral | While decentralized naming systems and alternative top-level domains expand choices,.com remains the universal global standard for commercial credibility and security. |
| Margin of Safety Entry Level |
| Conservative intrinsic floor providing an adequate margin of safety against regulatory pricing freezes or multiple de-rating. |
| lead_registrar_revenue_share | < 20.0% of revenue | Assess channel friction or registrar disintermediation; apply a haircut to near-term domain intake forecasts. |
| annual_capex | > $75.0M annually | Elevate maintenance capital intensity assumptions and trim projected free cash flow available for share cannibalization. |
