VRSN — VERISIGN INC/CA
Snapshot dated August 31, 2026.
Verisign operates as a global provider of domain name registry services and internet infrastructure, serving as the registry for several top-level domains, including .com, .net, .cc, .tv, .name, and .jobs. The company derives the vast majority of its revenue from the management of these registry domains, where it serves as the authoritative database for the registration of domain names. Its customers are primarily domain name registrars, companies that sell domain name registrations to end users. The company maintains a high-scale infrastructure that enables the navigation of the internet, operating root zone maintainer services under a contract with the Internet Corporation for Assigned Names and Numbers. Verisign is a leader in the domain registry space, competing indirectly with other entities managing different top-level domains, though its role is largely dictated by specific agreements with government and international bodies. A notable recent development for the company is its ongoing negotiation and renewal cycles with the U.S. Department of Commerce regarding the .com registry agreement, which governs the pricing and operational terms for its largest business segment.
Fair Value / Share
$252.51
Price on August 31, 2026
$288.36
Upside to fair value
-12.43%
Data by Equibles and SEC filings. Figures are as of August 31, 2026 and are not live.
Earnings Yield
Earnings Yield shows how much profit a company generates relative to its share price. EPS ÷ Stock Price.
Stock Price
$288.36
Market Cap
$26,269,140,500
Net Income (TTM)
$850,000,000
Diluted Shares
91.1 million
EPS (TTM)
$9.33
Earnings Yield
3.24%
AI Analysis
With a stock price of $288.36 and EPS of $9.33, Verisign has an earnings yield of 3.24%. This yield sits below the 4-5% return available from a safe alternative like a bond. This gap suggests that the current share price incorporates expectations for future earnings growth, as investors are willing to accept a lower immediate return on the current earnings baseline. For the earnings yield to increase, the share price would need to decrease, or the company would need to generate higher annual earnings. This specific measure does not capture future growth prospects, debt obligations, or the stability of the company’s underlying cash flows.
Return on Capital
EBIT ÷ (Net Working Capital + Net Fixed Assets) — how efficiently the business turns capital into profit.
EBIT (TTM)
$1,159,000,000
Net Working Capital
-$1,617,700,000
Net Fixed Assets
$227,700,000
Invested Capital
-$1,390,000,000
Return on Capital
Capital-free operations
This business operates on negative invested capital — customers pay in advance, so the business funds itself rather than tying up capital. Combined with positive EBIT, that is the strongest possible outcome in this framework, not a missing result.
AI Analysis
For Verisign, the framework computes an EBIT of $1.2B against invested capital of -$1.4B. Because the invested capital figure is negative, a traditional percentage-based return on capital cannot be calculated. However, this is the strongest outcome this framework can produce: the business generates significant operating profit without requiring any of its own capital to operate. This typically indicates a business model where cash is collected from customers well in advance of the service being delivered, allowing operations to be funded entirely by customer payments rather than the company’s own balance sheet. While this metric highlights extreme capital efficiency, it does not capture the company's future growth investments, which can be significant for early-stage or rapidly expanding businesses. Additionally, this measure is highly dependent on industry-specific cash cycles; businesses in capital-intensive sectors will naturally show lower figures, which does not necessarily imply inefficiency.
Acquirer's Multiple
Enterprise Value ÷ Operating Earnings — how many years of operating earnings it would take to buy the whole business.
| Company | Operating earnings | Enterprise value | Multiple |
|---|---|---|---|
| GDDYGoDaddy Inc. | $1.3B | $15.4B | 12.2x |
| VRSNVERISIGN INC/CA | $1.2B | $27.8B | 24.0x |
| NETCloudflare, Inc. | -$354.4M | $109.8B | — |
Where VRSN sits: 24.0x against a peer median of 12.2x (peers: 12.2x) — 96.5% above the median.
Show the enterprise value bridge for each companyHide the enterprise value bridge
VRSN
Debt $2.3B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $5.9M of operating lease liabilities as of 2026-06-30. These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
GDDY
Named as a competitor: Direct competitor in domain name registration and web presence services for small businesses and consumers
Debt $3.8B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $67M of operating lease liabilities as of 2026-06-30. These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
NET
Named as a competitor: Competes in domain name system (DNS) resolution, security, and infrastructure services
Debt $3.3B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $259.1M of operating lease liabilities as of 2026-06-30 ($180.8M non-current, $78.2M current). These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
Operating earnings — VRSN
AI Analysis
Verisign Inc (VRSN) records an enterprise value of $27.8B and operating earnings of $1.2B, resulting in an Acquirer's Multiple of 24.0x. Competitor GoDaddy (GDDY) has an enterprise value of $15.4B and operating earnings of $1.3B, yielding a multiple of 12.2x. Cloudflare (NET) currently has a loss, so no multiple can be calculated for it. Among the companies with a calculable figure, GoDaddy holds the lowest multiple, while Verisign holds the highest. Verisign’s 24.0x multiple sits 96.5% above the median of 12.2x. This comparison is calculated against a peer median of 12.2x. The gap between these multiples could narrow if Verisign increases its operating earnings relative to its enterprise value, or if differences in business model intensity and capital structure—which this measure does not capture—shift significantly over time.
FS-Score
A 10-check read on financial health, across profitability, balance-sheet stability and operating momentum.
FS-Score
9/10
This company scores high on profitability, stability, and momentum.
Section 1
Current Profitability
3/3
Verisign demonstrates strong profitability, passing all three checks with high returns on its asset base and cash generation that exceeds its reported net income.
- Return on Assets is positive at 62.27%
- Free Cash Flow to Total Assets is positive at 80.57%
- Accruals are healthy with a Cash Flow from Operations to Net Income ratio of 1.32
A score of 3/3 indicates that the business is converting accounting profits into actual cash, a result that would only change if the company's capital efficiency or cash conversion were to drop significantly.
Return on Assets (ROA > 0)
PassFree Cash Flow to Total Assets (FCFTA > 0)
PassAccruals (CFO / Net Income > 1)
PassSection 2
Stability
2/3
This section is mixed, as a reduction in the share count and improved liquidity were offset by an increase in long-term debt relative to assets.
- Leverage increased from 1.06 to 1.35 over the last year
- Liquidity improved with the current ratio rising from 0.43 to 0.49
- Net dilution was negative as share count fell from 98.2 million to 93.8 million shares
The score reflects a trade-off between shareholder-friendly buybacks and a growing debt burden, and it would improve if the company stabilized its long-term leverage.
Change in Leverage (↓ or unchanged)
FailChange in Liquidity (↑ Current Ratio)
PassNet Dilution (annual diluted weighted-average shares, this year vs last)
PassSection 3
Recent Operational Improvements
4/4
Operational performance is strong, with the company showing year-over-year gains in every efficiency and margin metric measured.
- ROA improved from 55.86% to 62.27% year over year
- FCFTA increased from 62.18% to 80.57%
- Gross Margin expanded from 87.71% to 88.15%
- Asset Turnover rose from 1.11 to 1.25
These results indicate the business is generating more revenue and cash per dollar of assets than it did a year ago, though a reversal in pricing power or sales volume would lower this score.
Change in ROA (↑)
PassChange in FCFTA (↑)
PassChange in Gross Margin (↑)
PassChange in Asset Turnover (↑)
PassFramework conclusion
The total score of 9/10 indicates high financial stability, driven by strong profitability and consistent operational improvements. This high score suggests that if the stock is priced cheaply, that price likely reflects a market miscalculation rather than fundamental business deterioration. While the score is robust, the rise in leverage remains the only signal of caution in the current financial profile.
- Return on Assets stands at a strong 62.27%
- Cash-backed earnings are confirmed by an accrual ratio of 1.32
- Shareholders benefited from a reduction in shares to 93.8 million
- Asset Turnover improved to 1.25, showing higher efficiency
Intrinsic Value (DCF)
A 10-year discounted cash flow, then the bridge from business value to value per share.
Reported cash flow → unlevered free cash flow
Free Cash Flow (reported)
$1.1B
+ After-Tax Interest Expense
$58.4M
= Unlevered Free Cash Flow
$1.1B
Business value (10-year DCF)
PV of Years 1–10
$9.5B
PV of Terminal Value
$15B
= Business Value
$24.5B
Terminal value share
61.2%
Business value → share value
Intrinsic Value (business)
$24.5B
+ Cash & Equivalents
$840.9M
− Debt
$2.3B
= Shareholders' Value
$23B
÷ Diluted Shares
91.1 million
= Fair Value / Share
$252.51
Divided by 91.1 million diluted shares — the weighted-average diluted count from the most recent quarterly income statement, for the quarter ended 2026-06-30.
Risk bucket → discount rate
low (9%)
Year-1 FCF
$1.1B
Trailing twelve months.
FY2023 $808M · FY2024 $874.5M · FY2025 $1.1B
Growth rate (yrs 1–10)
7%
Terminal growth (after yr 10)
3%
AI Analysis
Verisign operates a monopolistic domain registry business with highly predictable, recurring cash flows, supporting the application of a low-risk 9% discount rate. The 10-year forecast applies a 7.00% growth rate, reflecting the company's steady domain pricing power and top-level domain expansion. Beginning from a fixed Year-1 free cash flow of $1.1B, the model projects cash flows over the next decade. The terminal growth rate, fixed at 3% for all companies in this framework to reflect long-run economic expectations, generates a terminal value that accounts for 61.2% of the total business value. To calculate the value available to shareholders, the intrinsic value is adjusted by adding $840.9M in cash and subtracting $2.3B in debt. Dividing this total by 91.1 million shares results in a fair value per share of $252.51. Against the current price of $288.36, the analysis shows a margin of safety of -12.43%, representing the variance between this estimate and the market price. The result is most sensitive to the growth rate assumption; because the terminal value constitutes a majority of the business value, even small adjustments to the 7.00% growth figure would significantly alter the output.
Overall Verdict
How the five signals above stack up together, then the full synthesis.
Earnings Yield
3.24% vs ~4-5% bond-yield benchmark
Return on Capital
Capital-free operations — negative invested capital, positive EBIT
Acquirer's Multiple
24.0x against a peer median of 12.2x (peers: 12.2x) — 96.5% above the median.
FS-Score
9/10 — Financial rockstar
Intrinsic Value
-12.43% upside to fair value
Verisign demonstrates a distinct split between operational mechanics and pricing metrics. The FS-Score of 9/10 and the capital-free nature of the business—resulting in negative invested capital with positive EBIT—indicate high efficiency in how the company deploys resources and maintains its financial health. However, the valuation metrics provide a different perspective. The earnings yield of 3.24% sits below the bond-yield benchmark of 4-5%, and the Acquirer's Multiple of 24.0x is 96.5% above the peer median of 12.2x. Combined with an intrinsic value calculation showing a -12.43% margin of safety, the framework identifies a company that operates with strong financial stability but trades at a premium relative to its peers and benchmark targets. A shift in the Acquirer's Multiple would be the most significant indicator for reconciling this tension; if the company were to align more closely with the peer median, it would suggest a substantial narrowing of the gap between its current market valuation and the underlying business performance captured by the other metrics.
Comments
Notes from readers on VRSN — one each. Comments stay with the company, so they carry across to a later snapshot, and each one shows the date it was written.
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