VeriSign Inc. Shares
VeriSign Inc. is a global company providing domain name registration and internet security services. Its Registry Services ensure the security and stability of core internet structures and services, including .com and .net domains, two internet routing services, and key DNS functions.
The service package includes NIA, DDoS, Verisign iDefense, and Managed DNS services.
Competition
The company is a global leader in the sale of internet domains and other online services. The company faces competitive pressure from new technologies and the expansion of existing ones.
However, this does not necessarily have a negative impact on the activities of VeriSign Inc. The increasing Gross profitability only demonstrates strong competitive positions.
The company earns the most income in the United States and Europe, including the Middle East. It also holds a significant portion in the African market.
Finances
The company’s finances are active and conservative. With the net profit of 2022, it would take just 3.23 years to cover long-term debts. The return on undistributed profit is as high as 44%.
We highly appreciate the stable growth of the company’s earnings. The average annual growth over the past 10 years is 5%. This translates to an average revenue per domain of 8.20 USD.
They invest within the framework of their competencies. The activities of all subsidiary companies are related. The company adheres to its share buyback policy. The board consistently allocates a reserve for the repurchase of its own shares. So many of its own shares have been repurchased that the company’s Equity Capital has become negative. In 2022, the quantity of repurchased shares exceeded Net Profit by 1.56 times.
Moreover, the company is investing in U.S. Treasury securities. Knowing that their yields have recently increased, we can expect to see higher cash flows in the company’s future reports.
Of course, business is not forgotten either. A lot is invested in capital required for activity development and expansion. One dollar invested in Long-Term Tangible Assets earns a whopping 14.54 USD EPS.
If the owners of the company wanted to sell shares and invest today in the US 10Y Treasury bonds and achieve the same return as the company provided in 2022, then the shares should be sold at $170. This is lower than the current market price. It simply indicates that US stock prices, considering fixed and risk-free investments, have already risen significantly.
The overall result of the investment activity analysis looks very optimistic:
VeriSign Inc. shares
The company has not paid dividends since 2012. The financial surplus is reinvested. This creates greater value for shareholders than paying dividends. By the end of 2022, the average annual price growth over 10 years reached 18.13%. The standard deviation was 20.39%. This can explain such a price increase.
Since the first announcement of the idea, VeriSign Inc. shares have already provided investors with a pre-tax return of 395% or an average annual return of 17.24%.
The GRAPES method calculated the stock price to be very close to the market price at the time of writing – $227 USD. Our method’s calculated price doesn’t appear as optimistic as before, but there is still a potential expectation of up to 12% average annual growth in the stock price.
We recommend buying and holding VeriSign Inc. stocks. The outlook is positive.