VRSN — VERISIGN INC/CA
Snapshot dated August 27, 2026.
Verisign Inc. serves as the authoritative registry for several high-level domain names, most notably the .com and .net extensions. The company operates as the central database manager for these domains, processing registration requests from various third-party registrars that sell domain names to end users. By managing the underlying directory infrastructure for these top-level domains, Verisign ensures the global availability and security of internet addressing. The company’s revenue model is derived primarily from per-domain fees charged to registrars for the creation, renewal, and transfer of registrations. This role places Verisign in a unique position within the internet ecosystem, governed by long-term, renewable contracts with the Internet Corporation for Assigned Names and Numbers. Recently, the company has navigated specific pricing adjustments to its .com registry contracts, which define the limits of how much it can increase fees for its registrar partners.
Fair Value / Share
$252.51
Price on August 27, 2026
$294.53
Margin of Safety
-14.27%
Data by Equibles and SEC filings. Figures are as of August 27, 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
$294.53
Market Cap
$26,831,683,000
Net Income (TTM)
$850,000,000
Diluted Shares
91.1 million
EPS (TTM)
$9.33
Earnings Yield
3.17%
AI Analysis
Verisign currently has an earnings yield of 3.17%, derived from an EPS of $9.33 and a share price of $294.53. This figure sits below the 4-5% range associated with safe alternatives like government bonds. An earnings yield lower than this benchmark indicates that the market price is demanding a premium for each dollar of current earnings, effectively implying that the price incorporates expectations for future growth. For this yield to move higher, either the company’s earnings must increase significantly relative to the share price, or the stock price must decrease. This metric does not capture the company’s underlying debt structure, the duration of its operating contracts, or the specific competitive risks associated with its registry business.
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
Verisign generated $1.2B in EBIT over the trailing twelve months. Its invested capital is -$1.4B, calculated by combining -$1.6B in net working capital with $227.7M in net fixed assets. Because the invested capital is negative while the EBIT is positive, there is no percentage to calculate; however, this is the strongest possible outcome under this framework. It indicates the business requires no external capital of its own to function and remains profitable, often reflecting an operational model where customers fund the business through advance payments. This metric does not capture industry-specific capital requirements, and a significant change in payment cycles or operational structure would be necessary to alter this negative capital position.
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 | $15.3B | 12.1x |
| VRSNVERISIGN INC/CA | $1.2B | $28.3B | 24.4x |
| NETCloudflare, Inc. | -$354.4M | $110.8B | — |
Where VRSN sits: 24.4x against a peer median of 12.1x (peers: 12.1x) — 102.1% 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. It carries no separately reported lease obligations.
NET
Named as a competitor: competies in domain name registry and DNS infrastructure services
Debt $3.3B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. It carries no separately reported lease obligations.
GDDY
Named as a competitor: competes directly in domain registration and web infrastructure services
Debt $3.8B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. It carries no separately reported lease obligations.
Operating earnings — VRSN
AI Analysis
Verisign has an Acquirer's Multiple of 24.4x, calculated from an enterprise value of $28.3B and operating earnings of $1.2B. Among the peers with a numeric multiple, GDDY trades at 12.1x, derived from an enterprise value of $15.3B and operating earnings of $1.3B. The remaining competitor, NET, has an enterprise value of $110.8B but is losing money right now, so no multiple can be calculated for it. Verisign’s multiple is 24.4x against a peer median of 12.1x (peers: 12.1x) — 102.1% above the median. The Acquirer's Multiple measures how many years of operating earnings are required to purchase the enterprise value, but it does not account for differences in capital structure or growth expectations. This gap in multiples would narrow if Verisign experienced a contraction in its enterprise value relative to earnings, or if the market adjusted its expectations for the company's future operating profit growth compared to its peers.
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
Current profitability is Strong, with the company meeting all three benchmarks by generating high returns and cash flows relative to its assets.
- Return on Assets is positive at 62.27%.
- Free Cash Flow to Total Assets is positive at 80.57%.
- The accruals check is passed with a Cash Flow from Operations to Net Income ratio of 1.32, suggesting earnings are fully backed by cash.
A score of 3/3 indicates high earnings quality; this result would only change if cash flow generation began to lag behind accounting profits.
Return on Assets (ROA > 0)
PassFree Cash Flow to Total Assets (FCFTA > 0)
PassAccruals (CFO / Net Income > 1)
PassSection 2
Stability
2/3
The stability profile is Mixed, as efforts to reduce share counts and improve liquidity were offset by a rise in debt levels.
- Leverage increased with a Long-Term Debt to Total Assets ratio of 1.35, up from 1.06.
- Liquidity improved as the Current Ratio rose from 0.43 to 0.49.
- Net dilution is negative as the diluted share count fell from 98.2 million to 93.8 million shares.
The section score of 2/3 reflects a trade-off between share buybacks and increased balance sheet 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 improvements are Strong, as the business showed year-over-year gains across every efficiency and margin metric measured.
- Return on Assets improved from 55.86% to 62.27%.
- Free Cash Flow to Total Assets 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.
This 4/4 result indicates the business is becoming more efficient; a reversal in margin or turnover would lower this reading.
Change in ROA (↑)
PassChange in FCFTA (↑)
PassChange in Gross Margin (↑)
PassChange in Asset Turnover (↑)
PassFramework conclusion
The total FS-Score of 9/10 characterizes the company as a financial rockstar, driven by high current profitability and broad operational improvements. This high score suggests that the company's financial health is robust and that its current market price likely reflects something other than business deterioration. While the score is high, it does not account for valuation or future market demand, focusing strictly on the trailing financial data.
- Return on Assets improved significantly to 62.27%.
- Asset Turnover increased to 1.25, showing higher revenue per dollar of assets.
- The diluted share count was reduced to 93.8 million shares.
- Long-term debt relative to assets rose to 1.35, the only signal that did not pass.
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
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
Growth rate (yrs 1–10)
7%
Terminal growth (after yr 10)
3%
AI Analysis
Verisign operates with a monopolistic position managing core internet domain registries, specifically .com and .net, which provides highly predictable cash flows. Consequently, the framework assigns this company to the low-risk bucket with a 9% discount rate. The forecast applies a 7.00% annual growth rate over the next decade, reflecting steady price increases permitted by regulatory agreements alongside modest expansion in domain name registrations. This projection begins with a fixed Year-1 free cash flow of $1.1B. To capture long-term value, the framework incorporates a 3% terminal growth rate, which is a fixed assumption applied to all companies rather than a unique choice for this business. The terminal value represents 61.2% of the total business value. To derive the fair value per share, the framework adds $840.9M in cash to the calculated business value and subtracts $2.3B in debt before dividing the remaining $23B value by 91.1 million shares. This results in a computed fair value per share of $252.51. When compared to the current price of $294.53, the margin of safety is -14.27%, representing the buffer this estimate carries for being wrong. Because the terminal value accounts for more than half of the total business value, the result is most sensitive to the 3% terminal growth rate assumption; any change to this long-term forecast would shift the valuation most significantly.
Overall Verdict
How the five signals above stack up together, then the full synthesis.
Earnings Yield
3.17% vs ~4-5% bond-yield benchmark
Return on Capital
Capital-free operations — negative invested capital, positive EBIT
Acquirer's Multiple
24.4x against a peer median of 12.1x (peers: 12.1x) — 102.1% above the median.
FS-Score
9/10 — Financial rockstar
Intrinsic Value
-14.27% margin of safety
Verisign demonstrates strong operational efficiency, supported by a 9/10 FS-Score and negative invested capital, resulting in green signals for quality. However, these operational indicators contrast sharply with the valuation metrics. The Earnings Yield of 3.17% sits below the 4-5% bond-yield benchmark, and the Acquirer's Multiple of 24.4x stands 102.1% above the 12.1x peer median. Additionally, the Intrinsic Value check calculates a -14.27% margin of safety, indicating that current market pricing exceeds the calculated intrinsic range. The tension here lies between the company's ability to generate returns on capital and the premium price at which the market currently values these earnings relative to peers and bond yields. A shift in the overall picture would occur most significantly if the Acquirer's Multiple compressed toward the peer median, which would require either a substantial increase in operating earnings or a contraction in enterprise value.