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Let's talk about the popular VeriSign, Inc. (NASDAQ:VRSN). The company's shares saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$188 and falling to the lows of US$170. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether VeriSign's current trading price of US$181 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at VeriSign’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for VeriSign
Is VeriSign Still Cheap?
According to our valuation model, VeriSign seems to be fairly priced at around 13% below our intrinsic value, which means if you buy VeriSign today, you’d be paying a fair price for it. And if you believe the company’s true value is $208.46, then there’s not much of an upside to gain from mispricing. In addition to this, VeriSign has a low beta, which suggests its share price is less volatile than the wider market.
What kind of growth will VeriSign generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of VeriSign, it is expected to deliver a relatively unexciting earnings growth of 0.7%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? It seems like the market has already priced in VRSN’s future outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on VRSN, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.