| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 113.50 | -45 |
| Intrinsic value (DCF) | 72.30 | -65 |
| Graham-Dodd Method | 16.90 | -92 |
| Graham Formula | 85.60 | -58 |
VeriSign, Inc. (VRS.DE) is a global leader in domain name registry services and internet infrastructure, ensuring the security, stability, and resilience of the internet. Headquartered in Reston, Virginia, the company operates critical internet services, including the authoritative resolution for high-traffic domains like .com and .net, which are foundational to global e-commerce. VeriSign also maintains back-end systems for other top-level domains (TLDs) such as .cc, .gov, .edu, and .name, while supporting root zone maintainer services and operating two of the 13 internet root servers. As a key player in the Software - Infrastructure sector, VeriSign's services underpin digital trust and connectivity, making it an essential component of the internet's backbone. With a market cap of approximately €20.7 billion, the company combines steady revenue growth, strong cash flow generation, and a dominant position in domain name registry services.
VeriSign presents a compelling investment case due to its monopolistic position in the .com and .net domain registry market, which generates stable recurring revenue. The company benefits from high barriers to entry, strong cash flow (€902.6M operating cash flow in FY 2023), and a solid net income margin (~50%). However, risks include regulatory scrutiny over domain pricing, limited growth opportunities beyond core operations, and high leverage (€1.8B total debt). The stock's low beta (0.80) suggests defensive characteristics, making it attractive for conservative investors seeking exposure to internet infrastructure. The dividend yield (~1.3% based on €0.68/share) adds income appeal, though investors should monitor debt levels and potential shifts in domain demand.
VeriSign holds a near-monopoly in the .com and .net domain space, with contracts renewed by ICANN, ensuring long-term revenue stability. Its competitive advantage stems from its critical role in internet infrastructure, high switching costs for registrars, and unparalleled scale in domain resolution services. Unlike generic competitors, VeriSign's focus on premium TLDs provides pricing power and recurring revenue. However, the company faces indirect competition from new generic TLDs (gTLDs) managed by rivals like GoDaddy and Donuts, which dilute market concentration. VeriSign's operational efficiency (high margins) and robust security infrastructure differentiate it from smaller registry operators. The lack of direct competitors in legacy TLDs reinforces its moat, but dependence on ICANN policies and stagnant growth in legacy domains pose strategic challenges. Expansion into cybersecurity services could enhance its positioning against broader infrastructure players like Cloudflare.