VeriSign Inc

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VRSN : NASDAQ : Technology
$84.19 up 0.72 | 0.86%
Today's Range: 83.24 - 84.20
Avg. Daily Volume: 762,300
07/25/16 - 4:00 PM ET

Financial Analysis


VERISIGN INC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. VERISIGN INC has average liquidity. Currently, the Quick Ratio is 1.30 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 16.89% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)281.88258.42
EBITDA ($mil)181.63159.98
EBIT ($mil)166.77144.24
Net Income ($mil)107.4688.24


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)1895.831871.32
Total Assets ($mil)2323.672607.71
Total Debt ($mil)1865.251885.45
Equity ($mil)-1108.02-947.88


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin87.3387.38
EBITDA Margin64.4361.9
Operating Margin59.1655.81
Sales Turnover0.470.39
Return on Assets16.9713.38
Return on Equity0.00.0
Debt Q1 FY16 Q1 FY15
Current Ratio1.311.01
Debt/Capital2.462.01
Interest Expense28.822.17
Interest Coverage5.796.5


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)108.88116.43
Div / share0.00.0
EPS0.820.66
Book value / share-10.18-8.14
Institutional Own % n/a n/a
Avg Daily Volume761352.0994353.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 39.31 for the Internet Software & Services industry and a premium compared to the S&P 500 average of 25.05. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. After reviewing these and other key valuation criteria, VERISIGN INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
VRSN 27.79 Peers 39.31   VRSN 13.58 Peers 26.21

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

VRSN is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

VRSN is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
VRSN 21.94 Peers 20.61   VRSN 1.15 Peers 0.25

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

VRSN is trading at a premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

VRSN trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
VRSN NM Peers 5.44   VRSN 17.32 Peers 35.70

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

VRSN's P/B is negative making this valuation measure meaningless.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, VRSN is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
VRSN 8.33 Peers 8.94   VRSN 6.18 Peers 26.18

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

VRSN is trading at a valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

VRSN significantly trails its peers on the basis of sales growth

 

 

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