Is Now An Opportune Moment To Examine VeriSign, Inc. (NASDAQ:VRSN)?

Let's talk about the popular VeriSign, Inc. (NASDAQ:VRSN). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a large-cap stock, which tends to be well-covered by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at VeriSign’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for VeriSign

What's the opportunity in VeriSign?

According to my valuation model, VeriSign seems to be fairly priced at around 13.51% above my intrinsic value, which means if you buy VeriSign today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $198.46, there’s only an insignificant downside when the price falls to its real value. In addition to this, VeriSign has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from VeriSign?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by a double-digit 14% over the next couple of years, the outlook is positive for VeriSign. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? VRSN’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on VRSN, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 3 warning signs for VeriSign you should be mindful of and 1 of these makes us a bit uncomfortable.

If you are no longer interested in VeriSign, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.