VeriSign, Inc. (NASDAQ:VRSN) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a good week for VeriSign, Inc. (NASDAQ:VRSN) shareholders, because the company has just released its latest quarterly results, and the shares gained 7.9% to US$306. Results were roughly in line with estimates, with revenues of US$410m and statutory earnings per share of US$2.21. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the current consensus from VeriSign's three analysts is for revenues of US$1.65b in 2025. This would reflect a satisfactory 3.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 4.1% to US$8.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.64b and earnings per share (EPS) of US$8.78 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for VeriSign

The consensus price target rose 14% to US$307despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of VeriSign's earnings by assigning a price premium. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on VeriSign, with the most bullish analyst valuing it at US$340 and the most bearish at US$250 per share. This is a very narrow spread of estimates, implying either that VeriSign is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the VeriSign's past performance and to peers in the same industry. It's clear from the latest estimates that VeriSign's rate of growth is expected to accelerate meaningfully, with the forecast 6.4% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, VeriSign is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that VeriSign's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for VeriSign going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for VeriSign (1 is potentially serious!) that you need to take into consideration.

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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.