VeriSign, Inc. (NASDAQ:VRSN) 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. However, what if the stock is still a bargain? Today I will analyse the most recent data on VeriSign’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for VeriSign
Is VeriSign Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19.14% 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 that the stock is really worth $172.43, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, VeriSign’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of VeriSign look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 8.0% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for VeriSign, at least in the short term.
What This Means For You
Are you a shareholder? It seems like the market has already priced in VRSN’s future outlook, 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 tabs on VRSN, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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. Our analysis shows 3 warning signs for VeriSign (1 can't be ignored!) and we strongly recommend you look at them before investing.
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.
About NasdaqGS:VRSN
VeriSign
Provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names worldwide.
Solid track record and good value.
