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VeriSign Inc VRSN

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Wide-Moat Verisign Posts a Mixed Quarter; Maintaining $187 FVE; Shares Modestly Overvalued

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Wide-moat Verisign reported mixed second-quarter results, finishing the quarter largely in line with our top-line estimates while narrowly missing our bottom-line expectations. The company also moderately increased its fiscal 2021 guidance for domain-name and sales growth, citing better business conditions across geographies for the upward revision. We are maintaining our fair value estimate of $187 per share. We view the firm’s shares as overvalued and recommend investors wait for a larger margin of safety before committing capital to the name.

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Company Profile

Business Description

Verisign is the sole authorized registry for several generic top-level domains, including the widely utilized .com and .net top-level domains. Additionally, the company operates two of the world's 13 root servers that are used to route Internet traffic. In 2018, the firm sold off its security services business, signaling a renewed focus on the core registry business. Verisign generates about 60% of its sales from the United States.

12061 Bluemont Way
Reston, VA, 20190
T +1 703 948-3200
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Classic Growth
Employees 909