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VeriSign is scheduled to report its third-quarter results on October 22. Analysts are looking for revenue of about 440 million dollars and earnings of 2.46 dollars per share. The main thing to watch is the total count of .com and .net domain names, which provides the foundation for the company's steady growth.
A law firm has filed an antitrust lawsuit against VeriSign and ICANN, the nonprofit that coordinates the internet's naming system. The suit alleges that the two organizations have formed an illegal monopoly that allows VeriSign to charge billions of dollars in excessive fees to website owners.
VeriSign's business relies on its exclusive right to manage .com and .net domains, which allows it to raise prices regularly regardless of the economy. While the company has successfully defended its contract structure in the past, any legal challenge to its pricing power strikes at the core of how it makes money. We will watch to see if this case gains enough traction to threaten its scheduled price hikes.
Source: Business Wire
Wedbush raised its target price for the stock from $324 to $341 while keeping a positive rating. This suggests the firm expects the stock to rise about 20 percent from where it trades today. The new target is slightly lower than the $348 average across all Wall Street analysts. Because this was a small target tweak without a change in the firm's overall rating, it is a routine update that doesn't change the outlook for the business.
Source: Wedbush
Wedbush raised its price target from $318 to $324 while keeping an Outperform rating. This reflects confidence in the company's ability to grow through its scheduled price increases for .com domains. Because the company has a legal monopoly on these registrations, analysts often see it as a safe harbor during economic uncertainty.
Source: Wedbush
Revenue reached $435 million last quarter, matching what analysts expected. While earnings of $2.38 per share were slightly below the $2.42 target, they still grew from $2.21 a year ago. The company benefited from steady demand for new domain names and its ability to raise prices on existing ones.
For long-term owners, the focus remains on the company's role as the essential plumbing of the internet. It has now maintained 100 percent uptime for .com and .net for 29 years. This reliability supports its unique contract that allows for regular price hikes, which should continue to drive profit growth even if the total number of websites doesn't grow quickly.
Source: 8-K filing
Management typically delivers results that land within a few pennies of expectations, showing they have a tight grip on this highly predictable business.
| Expectation | |
|---|---|
| EPS | $2.46 |
| Revenue | $441M |