VeriSign (NASDAQ:VRSN) Reaches New 52-Week High on Earnings Beat

Key Points

• VeriSign's stock reached a new 52-week high of $308.00 after the company reported better-than-expected earnings, with an EPS of $2.21 against an estimate of $2.20.
• The company also announced a $0.77 quarterly dividend, representing an annualized dividend of $3.08 and a yield of 1.01%.
• VeriSign's Board of Directors initiated a stock repurchase plan authorizing the company to buy back $1.11 billion worth of shares, indicating potential undervaluation.
• Analysts have shown confidence in VeriSign, with upgrades from "hold" to "buy" and increased price targets following the positive earnings report.

VeriSign, Inc. (NASDAQ:VRSN - Get Free Report) hit a new 52-week high during mid-day trading on Friday following a better than expected earnings announcement. The company traded as high as $308.00 and last traded at $301.57, with a volume of 165475 shares trading hands. The stock had previously closed at $286.67.

The information services provider reported $2.21 EPS for the quarter, beating the consensus estimate of $2.20 by $0.01. The company had revenue of $409.90 million for the quarter, compared to the consensus estimate of $410.35 million. VeriSign had a negative return on equity of 40.87% and a net margin of 50.05%. The firm's revenue for the quarter was up 5.9% on a year-over-year basis. During the same quarter in the prior year, the business earned $2.01 earnings per share.

VeriSign Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Wednesday, August 27th. Shareholders of record on Tuesday, August 19th will be paid a dividend of $0.77 per share. The ex-dividend date is Tuesday, August 19th. This represents a $3.08 dividend on an annualized basis and a dividend yield of 1.11%. VeriSign's payout ratio is presently 36.75%.

VeriSign announced that its board has authorized a share repurchase plan on Thursday, July 24th that permits the company to buyback $1.11 billion in shares. This buyback authorization permits the information services provider to reacquire up to 4.1% of its shares through open market purchases. Shares buyback plans are often a sign that the company's board believes its stock is undervalued.

Analysts Set New Price Targets

Several research firms have recently weighed in on VRSN. Wall Street Zen upgraded shares of VeriSign from a "hold" rating to a "buy" rating in a research note on Saturday, April 12th. Citigroup restated a "buy" rating on shares of VeriSign in a report on Tuesday, July 8th. Finally, Robert W. Baird raised their target price on VeriSign from $285.00 to $305.00 and gave the company an "outperform" rating in a research report on Tuesday, July 1st.

Insider Buying and Selling

In related news, EVP Thomas C. Indelicarto sold 501 shares of VeriSign stock in a transaction that occurred on Tuesday, July 8th. The shares were sold at an average price of $287.10, for a total value of $143,837.10. Following the completion of the transaction, the executive vice president directly owned 37,769 shares in the company, valued at approximately $10,843,479.90. The trade was a 1.31% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO D James Bidzos sold 2,000 shares of the stock in a transaction dated Wednesday, July 16th. The stock was sold at an average price of $281.35, for a total value of $562,700.00. Following the sale, the chief executive officer directly owned 515,772 shares in the company, valued at $145,112,452.20. This trade represents a 0.39% decrease in their position. The disclosure for this sale can be found here. Insiders have sold a total of 40,004 shares of company stock worth $11,278,592 over the last 90 days. 0.84% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On VeriSign

A number of institutional investors have recently added to or reduced their stakes in the business. Norges Bank purchased a new position in VeriSign in the 4th quarter worth approximately $222,840,000. AQR Capital Management LLC increased its stake in VeriSign by 75.5% in the 1st quarter. AQR Capital Management LLC now owns 2,329,640 shares of the information services provider's stock worth $586,417,000 after purchasing an additional 1,002,510 shares during the period. GAMMA Investing LLC grew its holdings in VeriSign by 34,326.0% in the 1st quarter. GAMMA Investing LLC now owns 697,127 shares of the information services provider's stock worth $176,980,000 after acquiring an additional 695,102 shares during the last quarter. Alliancebernstein L.P. increased its holdings in VeriSign by 477.1% during the 1st quarter. Alliancebernstein L.P. now owns 791,271 shares of the information services provider's stock valued at $200,880,000 after purchasing an additional 654,170 shares during the period. Finally, Robeco Institutional Asset Management B.V. raised its holdings in VeriSign by 161.4% in the 2nd quarter. Robeco Institutional Asset Management B.V. now owns 860,068 shares of the information services provider's stock worth $248,388,000 after purchasing an additional 531,041 shares in the last quarter. 92.90% of the stock is currently owned by institutional investors.

VeriSign Trading Down 9.6%

The company has a market cap of $25.96 billion, a PE ratio of 33.00 and a beta of 0.78. The stock has a 50 day moving average price of $282.50 and a 200 day moving average price of $256.24.

About VeriSign

VeriSign, Inc, together with its subsidiaries, provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names worldwide. The company enables the security, stability, and resiliency of internet infrastructure and services, including providing root zone maintainer services, operating two of thirteen internet root servers; and offering registration services and authoritative resolution for the .com and .net domains, which supports global e-commerce.