VeriSign, Inc. Fundamental Analysis (NASDAQ: VRSN)
VeriSign, Inc. (NASDAQ: VRSN) shows moderate financial fundamentals with a PE ratio of 33.52, profit margin of 49.07%, and ROE of -38.17%. The company generates $1.7B in annual revenue with moderate year-over-year growth of 6.37%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 28.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze VRSN's fundamental strength across five key dimensions:
Efficiency Score
ExcellentVRSN demonstrates superior asset utilization.
Valuation Score
WeakVRSN trades at a premium to fair value.
Growth Score
ExcellentVRSN delivers strong and consistent growth momentum.
Financial Health Score
ModerateVRSN shows balanced financial health with some risks.
Profitability Score
ModerateVRSN maintains healthy but balanced margins.
Key Financial Metrics
Is VRSN Expensive or Cheap?
P/E Ratio
VRSN trades at 33.52 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, VRSN's PEG of 4.06 indicates potential overvaluation.
Price to Book
The market values VeriSign, Inc. at -12.31 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 21.79 times EBITDA. This signals the market has high growth expectations.
How Well Does VRSN Make Money?
Net Profit Margin
For every $100 in sales, VeriSign, Inc. keeps $49.07 as profit after all expenses.
Operating Margin
Core operations generate 67.63 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-38.17 in profit for every $100 of shareholder equity.
ROA
VeriSign, Inc. generates $66.39 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
VeriSign, Inc. generates strong operating cash flow of $1.06B, reflecting robust business health.
Free Cash Flow
VeriSign, Inc. generates strong free cash flow of $1.02B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $11.36 in free cash annually.
FCF Yield
VRSN converts 3.64% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
33.52
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.06
vs 25 benchmark
P/B Ratio
Price to book value ratio
-12.31
vs 25 benchmark
P/S Ratio
Price to sales ratio
16.16
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-0.78
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.42
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.38
vs 25 benchmark
ROA
Return on assets percentage
0.66
vs 25 benchmark
ROCE
Return on capital employed
-11.58
vs 25 benchmark
How VRSN Stacks Against Its Sector Peers
| Metric | VRSN Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 33.52 | 32.70 | Neutral |
| ROE | -38.17% | 758.00% | Weak |
| Net Margin | 49.07% | -4312.00% (disorted) | Strong |
| Debt/Equity | -0.78 | 0.96 | Strong (Low Leverage) |
| Current Ratio | 0.42 | 12.15 | Weak Liquidity |
| ROA | 66.39% | 1067467.00% | Weak |
VRSN outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews VeriSign, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
63.06%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
26.17%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
86.07%
Industry Style: Growth, Innovation, High Beta
High Growth