VeriSign Inc

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VRSN : NASDAQ : Technology
$74.43 -0.95 | -1.26%
Today's Range: 74.28 - 75.67
Avg. Daily Volume: 879,400
08/24/16 - 4:00 PM ET

Financial Analysis


VERISIGN INC's gross profit margin for the second 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.

During the same period, stockholders' equity ("net worth") has decreased by 13.37% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)286.47262.54
EBITDA ($mil)190.82164.84
EBIT ($mil)176.27148.97
Net Income ($mil)113.2193.01


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)1907.01884.81
Total Assets ($mil)2314.172570.66
Total Debt ($mil)1868.581859.14
Equity ($mil)-1127.33-994.32


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin88.0687.68
EBITDA Margin66.6162.78
Operating Margin61.5356.74
Sales Turnover0.480.4
Return on Assets17.9113.3
Return on Equity0.00.0
Debt Q2 FY16 Q2 FY15
Current Ratio1.320.99
Debt/Capital2.522.15
Interest Expense28.8628.65
Interest Coverage6.115.2


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)107.18114.03
Div / share0.00.0
EPS0.870.7
Book value / share-10.52-8.72
Institutional Own % n/a n/a
Avg Daily Volume813079.0891491.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 36.87 for the Internet Software & Services industry and a value on par with the S&P 500 average of 25.30. 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 23.56 Peers 36.87   VRSN 12.24 Peers 23.76

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 19.73 Peers 23.79   VRSN 1.01 Peers 0.22

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

VRSN is trading at a discount 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 5.51   VRSN 24.50 Peers 36.06

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 7.19 Peers 8.89   VRSN 7.25 Peers 27.87

Discount. 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 discount to 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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