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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Verisign, Inc. (XNAS:VRSN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VRSN
Name:
VERISIGN, INC. (XNAS:VRSN)
Sector:
200.50M
Industry:
Software�Infrastructure
CEO:
Mr. D. Bidzos
Total Employees:
904
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 795.97% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VERISIGN, INC.(VRSN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
181.45
One Month Price Target:
$182.47
Six Month Price Target :
$187.55
Likely Price in One Year's Time:
Ticker:
$193.65
Likely Trading Range Today Under (Normal Volatility)
$180.85
Price Upper limit ($) :
$182.1
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$173.91
This week:
$164.58
This month :
$147.72
Other Primary facts
Market Cap:
19.56B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
107.28M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.81%
-14.26%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$216.47
$200.49
$146.43
$162.41
Medium risk (<10%) entry points
Buy Call
Sell Call
$195.29
Buy Put:
Sell Put:
$191.88
$167.56
$171.02
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VRSN
Sharpe Ratio:
0.26%
Comparison:
VRSN, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -84.27% lower than the industry
& is -88.72% lower than the market/S&P 500 average
Average Returns/Yield of
VRSN
Daily returns:
0.01%
Weekly returns:
0.07%
Monthly returns:
0.28%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is -76.52% below industry average
Classification:
VRSN, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.6
Statistical test of Returns:
VRSN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.03%
Weekly Volatility:
4.54%
Monthly Volatility:
9.08%
Yearly Volatility:
31.46%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.70%
Volatility in last five trading days has been -65.65% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.16%
Weekly VaR:
-9.30%
Monthly VaR:
-18.59%
How Much Can the price of
VRSN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-64.40%
This translates to price declining to:
$151.91
This translates to price declining to:
$64.59
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
VRSN is a 31.22% riskier investment compared to the market/S&P 500 & is 12.41% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -39.04% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VRSN
Beta in relation to market/S&P 500--1.00
Expected beta in 1 year's time:
0.743
Expected beta in 3 year's time:
1.051
Unlevered (debt free) Beta:
-2.664
Beta in relation to Nasdaq (XNAS):
0.866
Beta in relation to all global stocks::
0.718
Beta Comparison & Analysis
Beta of competitors/peers::
1.308
Beta is -23.47% lower than peers
Average Industry Beta:
1.112
Beta is -9.97% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.066
Alpha is -283.23% below industry average alpha yield
Alpha is -422% below the market average
Analysis of Cost of Capital of
VRSN
Equity cost of capital:
0.100
Equity cost of capital is -7.05% below industry mean WACC
Unlevered (without debt) cost of capital:
-26.63%
Before-tax cost of debt:
4.45%
After-tax cost of debt:
3.52%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.52%
WACC is -45.17% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$12.59
Revenue growth rate per share of (3Y):
-15.15
Annual revenue growth rate is -89.38% below industry average
EPS:
$7.11
Expected Annual growth rate of EPS (3Y):
10.63%
Expected future EPS growth rate is -64.72% lower than the Software�Infrastructure industry
Free cash flow (FCF) per share:
$6.74
-
-
Debt per share
$16.65
EBITDA per share
$8.65
Valuation Analysis Today of
VRSN
P/E Ratio:
24.73
P/E Ratio of Competitors/Peers:
19.62
P/E ratio is 25.99% higher than main peers & is -62.10% lower than the industry
Stock price/value with industry average P/E ratio: $463.82
VRSN is -60.88% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
14.41
Price to sales ratio is 31.21% above the industry mean
P/B (Price to book value ratio):
-15.15
Price to free cash flow: 26.92
Price to free cash flow ratio is -37.30% lower than the industry
Net income growth rate (3Y):
32.86%
Net income growth rate is -99.61% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-139.00%
Net debt to equity ratio:
-79.98%
Debt to assets ratio:
90.53%
Net debt to assets ratio:
52.09%
Debt-to-asset ratio is 29.83% above industry average
Ability to repay debt:
Interest coverage ratio:
11.67
Interest coverage ratio is -105.53% less than industry average
Looking forward:
Debt growth rate:
-0.39%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.764
Statistical significance of correlation:
VRSN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is 59.30% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
0.003
Covariance of price movement with the market:
0.003
Kurtosis
9.831
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.238
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
VRSN
Gross Profit Margin Ratio:
342%
Operating Profit Margin Ratio:
65.23%
Operating profit margin is -649.62% lower than the industry
Net Profit Margin Ratio:
342%
Effective Tax Rate:
1.03%
Effective tax rate is -96.72% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-61.63%
Return on equity (ROE) is -157.73% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
40.14%
Return on assets (ROA) is -1159.88% lower than the industry
Financial Leverage:
10.6x
Current Ratio:
1.16
Current ratio is -49.97% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 34.4 years
Stock based compensation to net income ratio:
1.79%
In-depth Efficiency Analysis
Revenue generated per employee:
1.5M
Each employee generates 279% more revenue than industry average revenue per employee
EBITDA generated per employee:
1.0M
Each employee generates 1471% more EBITDA than industry average revenue per employee
Profit generated per employee:
876.1K
Each employee generates 4083% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
221.8K
Each employee generates 1021% more free cash flow than industry average revenue per employee
Assets/Capital per employee
780.4K
Each employee generates 1021% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 7.85%
Growth rate in R&D investment/expenditure is -402.54% lower than the industry
Competitors/Peer firms of
VRSN
DOCUSIGN, INC. (XNAS:DOCU)
CDW CORPORATION (XNAS:CDW)
TERADYNE, INC. (XNAS:TER)
Garmin Ltd (XNYS:GRMN)
MXIM
ON SEMICONDUCTOR CORPORATION (XNAS:ON)
SEAGATE TECHNOLOGY HOLDINGS PUBLIC LIMITED COMPANY (XNAS:STX)
ZEBRA TECHNOLOGIES CORPORATION (XNAS:ZBRA)
MONGODB, INC. (XNAS:MDB)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�13%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.35B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
195.67M
1.16B
83.12M
110.98M
190.88M
31.39M
-
273.99M
366.00K
79.52M
48.27M
927.99M
881.20M
791.98M
800.20M
8.23M
791.98M
Statement of Cash Flow
Date:
Period:
11.90M
Differed Income Tax :
-
Stock Based Compensation :
14.20M
Change in Working Capital :
22.90M
Accounts Receivables:
-
Other Working Capital:
29.50M
Other Non-Cash Items:
600.00K
Net Cash Provided by Operating Activities:
207.10M
Investments in PP&E:
- 6600.00K
Net Acquisitions:
-
Purchases of Investments:
- 164900.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
758.50M
451.10M
1.21B
6.70M
-
51.40M
1.27B
252.20M
52.50M
145.00M
-
230.80M
25.00M
705.50M
-
1.97B
7.40M
-
66.10M
925.90M
155.20M
1.09B
1.79B
79.30M
2.17B
-
3.26B
13.44B
- 14720300.00K
- 3000.0K
-
March 31, 2022 at 6:00:00 AM
469.66M
- 1285100.00K
1.97B
-
1.79B
1.0B
696.00M
-
524.50M
-
-
- 204600.00K
-
8.20M
- 196400.00K
- 100.00K
535.10M
763.90M
228.80M
207.10M
- 6600.00K
200.50M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
VRSN
2023
2024
2025
2026
2027
$208.25
$222.25
$237.20
$253.16
$270.18