VERISIGN INC/CA (VRSN): what the price assumes

In the published model solve dated 2026-Q2, anchored at $291.93, VERISIGN INC/CA (VRSN) is priced for +15.6% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/VRSN

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.4% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple; earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.

Per-Model Detail (n=5)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• VeriSign operates the .com and .net domain registries, a government-sanctioned monopoly over a core piece of internet infrastructure. The economics are extraordinary: a 67.9% operating margin, and a record domain base of 176.1 million names in Q1 2026, up 3.7% year over year.

• The model has two levers, both favorable right now. Domain growth accelerated enough that management raised full-year base-growth guidance to 3.1% to 4.3%, and the company gave notice of a $0.71 increase in the wholesale .com price to $10.97, effective November 1, 2026, the first allowed since early 2024.

• The price asks a lot for that quality. At $264.83 the market pays about 22 times operating income, which implies operating growth around 15% a year for five years, well above the mid-single-digit domain-plus-pricing math the registry actually produces. No standard valuation frame reaches the current price.

Bull Case

The honest place to start is how far the price sits above the valuation methods, because for VeriSign that distance is the whole debate. No valuation family in the X-ray reaches $264.83 (June 28, 2026); the earnings-power family lands at well under half the price and the peer-multiple family below it too. Yet this is one of the highest-quality businesses in the market, so the question is whether the methods are simply too blunt to price what VeriSign is. It is a government-sanctioned monopoly: under its registry agreements with ICANN it collects a fee per .com and .net registration, and its 10-K describes registrars as its direct customers contracting under those agreements. The result is a 67.9% operating margin, interest covered fifteen times, and a recurring revenue stream as close to an annuity as exists in technology. Standard valuation frames systematically understate a toll booth on the internet.

The two levers that drive the business are both working. Demand for .com and .net pushed the domain base to a record 176.1 million names, up 3.7% year over year, with the highest new registrations since 2021, helped in part by AI-related activity, strong enough that management raised full-year base-growth guidance from a range starting at 1.5% to one of 3.1% to 4.3%. On top of volume comes price: VeriSign gave notice of a $0.71 increase in the wholesale .com fee to $10.97 effective November 1, 2026, its first since early 2024, and its agreements permit 7% annual .com increases in the final four years of the term. Volume growth plus contractual pricing power is a rare combination, and it is exactly what compounds a registry's revenue.

The capital return turns the monopoly's cash into per-share value with unusual consistency. VeriSign returned about $1.13 billion to shareholders over the trailing four quarters, $843 million in buybacks and $289 million in dividends, and raised the dividend 5.2% to $0.81 a share. Because the share count keeps shrinking, each year's registry cash lands on fewer shares. The .com Registry Agreement was renewed by ICANN with presumptive renewal rights running the current term to 2030, removing a key overhang. The analyst consensus is a buy with targets ranging into the low-to-mid three hundreds. The bull case is simple and durable: a regulated monopoly with accelerating volume, contractual pricing, and a relentless buyback, priced by methods that cannot capture a franchise this defensible.

Bear Case

The disruption risk for a registry is not a rival registry, it is the political and regulatory machinery that grants the monopoly in the first place, and that machinery is stirring. The pricing power the bull case prizes exists only because the 2018 Cooperative Agreement lets VeriSign raise .com fees, and that arrangement is increasingly contested. Senator Elizabeth Warren has publicly argued that the .com monopoly enables predatory pricing that far outpaces the actual cost of running the registry, and the National Telecommunications and Information Administration has signaled a desire for price reductions even while it remains legally bound by the current agreement. The single most leveraged variable on this thesis is therefore not domain volume but Washington: a future renegotiation that caps or rolls back pricing would strike directly at the highest-margin part of the model, and the company itself warns in its 10-K that changes or challenges to the pricing provisions in the .com Registry Agreement could materially harm its business.

The structural challenge underneath is that domains are a slow-growth market in absolute terms. The base grew 3.7%, which is good for a registry but is not technology growth, and the long-run trend in how people find businesses, through apps, social platforms, search and increasingly AI assistants rather than typed-in .com addresses, raises a quiet question about whether the domain name remains as central a digital asset in a decade. The first-quarter acceleration is encouraging, but a mature, single-product franchise has limited organic levers beyond price, and price is exactly what regulators are eyeing.

That collision with the valuation is what makes the price hard to defend. At 22 times operating income the price embeds roughly 15% annual operating growth for five years, far above the mid-single-digit volume-plus-pricing math the registry produces, and no valuation family reaches the quote. The market is paying a premium that assumes both the volume acceleration and the full pricing schedule persist undisturbed. A telling signal sits in the ownership: Berkshire Hathaway, a long-time holder since 2012, sold about a third of its stake, roughly 4.3 million shares around $285, cutting its position to 9.6% from 14.2%. When a patient, quality-focused owner trims a monopoly at a price near the current level, it is at least a reminder that even a wonderful business can be fully valued, and that the regulatory tail risk is not free.

Valuation

VeriSign is the rare monopoly whose price the standard methods cannot reach. At $264.83 the market pays about 22 times company-wide operating income, which under an 8.6% cost of capital and 4% terminal growth solves to operating growth of roughly 15% a year over five years. No valuation family in the X-ray reaches the price: it is rich on earnings power, where the family lands at well under half the quote, and on peer multiples. The reliability on the solve is reasonable, so the implied figure carries weight, and that figure is the crux: 15% implied growth is far above what a registry that grows its base 3% to 4% and raises price toward 7% can mechanically produce.

The counterargument is real, which is why the price is not absurd. VeriSign's 67.9% operating margin, near-zero capital intensity, and contractual, recurring revenue are economics that justify a premium the conventional methods, built for ordinary businesses, will always flag as expensive. The franchise also converts essentially all of its profit to cash and returns it, so the per-share growth runs ahead of the headline revenue growth as the share count shrinks. A toll booth on the internet legitimately deserves more than a market multiple.

The honest synthesis is that the price already capitalizes the monopoly close to perfection and leaves no room for the regulatory risk that is unique to it. The implied 15% growth is a stretch even before accounting for the political pressure on .com pricing, and the analyst targets, ranging from the high two-hundreds into the mid three-hundreds, bracket the price with the bullish end assuming the pricing schedule runs undisturbed. Berkshire trimming a third of a long-held stake near these levels is a quiet vote that the price is full. The conclusion is that this is a superb business at a demanding price: the return depends on both the volume acceleration and the contractual price increases persisting, against a backdrop where the body that grants the pricing power is being lobbied to take some of it back.

Catalysts

The recurring catalyst is the domain base and the pricing schedule. Q1 2026 set a record at 176.1 million .com and .net names, up 3.7% year over year with the strongest new registrations since 2021, and management raised full-year base-growth guidance to 3.1% to 4.3% and revenue guidance to $1.73 billion to $1.745 billion. The other lever is the $0.71 wholesale .com price increase to $10.97 effective November 1, 2026, with the agreement permitting 7% annual increases in the final four years of the term. Each quarter's net domain additions and the timing of price increases are the direct drivers.

The defining swing factor is regulatory. The .com Registry Agreement was renewed by ICANN with presumptive renewal rights to 2030, which removed a major overhang, but pricing remains contested: Senator Warren has criticized the monopoly pricing and the NTIA has signaled a preference for price reductions, even as it is bound by the current Cooperative Agreement. Any move to renegotiate or cap .com pricing would be the most important catalyst for the stock, in either direction, because pricing is the highest-margin lever.

Capital return and ownership round out the picture. VeriSign returned about $1.13 billion to shareholders over the trailing four quarters and raised the dividend 5.2% to $0.81, so the buyback pace against the share price is a steady driver. On sentiment, Berkshire Hathaway sold about a third of its long-held stake near $285, a notable marker, while the analyst consensus remains a buy with targets ranging into the low-to-mid three hundreds. A continuation of the volume acceleration alongside undisturbed pricing is what would justify the premium the price embeds.

Peer Cohorts (Per Segment, With Filing Citations)

Domain name registry (single segment) (reported)

• GDDY (GoDaddy Inc.)
• FY2025 10-K: Registry provides a high-performance back-end registry technology platform with a portfolio of TLDs including .biz, .nyc, and .us. Our primary domains product offerings include: Primary Registrations . Using our website, mobile application or the Airo platform, we offer customers the ability to search for and register…
• FY2025 10-K: …over the contract term. For each domain registration or renewal, we have one performance obligation consisting of two promises to ensure: (1) the customer has exclusive use of the domain during the applicable registration term and (2) the domain is accessible and appropriately directed to its underlying content.…
• FDS (FACTSET RESEARCH SYSTEMS INC.)
• FY2025 10-K: T RESEARCH SYSTEMS INC. (Exact name of registrant as specified in its charter) Delaware 13-3362547 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 45 Glover Avenue , Norwalk , Connecticut 06850 (Address of principal executive offices, including zip code) Registrant's…
• FY2025 10-K: …does not believe that the ultimate outcome of these unresolved matters against us, individually or in the aggregate, is likely to have a material adverse effect on our consolidated financial position, annual results of operations and cash flows. However, these matters are subject to inherent uncertainties and…
• VRSK (Verisk Analytics, Inc.)
• FY2025 10-K: …consolidated financial statements include all of our accounts. All intercompany accounts and transactions have been eliminated. (b) Revenue Recognition The following describes our primary types of revenues and the applicable revenue recognition policies. We recognize revenues through recurring and non-recurring…
• FY2025 10-K: …Subscription is a single performance obligation that represents a series of distinct services (daily access to our online portal and related content) that are substantially the same and that have the same pattern of transfer to our customer. We recognize revenue for Hosted Subscriptions ratably over the performance…
• CLVT (CLARIVATE PLC)
• FY2025 10-K: …jurisdictions around the world. Because of the re-occurring nature of the patent and trademark lifecycle, our customers engage us on a regular basis to ensure their intellectual property rights remain protected. These contracts typically include evergreen clauses or are multi-year agreements. We invoice and recognize…
• FY2025 10-K: …than 45,000 customers worldwide, including academic institutions and libraries, research organizations, corporations, law firms, government entities, and companies across the pharmaceutical, biotechnology, and medical device industries, providing a trusted foundation and quality user experience resulting in our…
• EVTC (EVERTEC, Inc.)
• FY2025 10-K: …Inc., Totvs S.A., and Stefanini S.A. The main competitive factors are organizational capabilities, portfolio comprehensiveness, price, system performance and reliability, system functionality, security, service capabilities, and disaster recovery and business continuity capabilities. Intellectual Property We own…
• FY2025 10-K: 2022-12-01 2022-12-01 0001559865 evtc:AdjustedSecuredOvernightFinancingRateSOFROvernightIndexSwapRateMember evtc:TermBDueOnOctoberThirtyTwoThousandThirtyMember us-gaap:SecuredOvernightFinancingRateSofrMember evtc:CreditAgreementOctober2023Member us-gaap:LineOfCreditMember 2023-10-30 2023-10-30 0001559865…
• CSGS (CSG SYSTEMS INTERNATIONAL, INC.)
• FY2025 10-K: 169 Inverness Dr W , Suite 300 Englewood , Colorado 80112 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303) 200-2000 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol Name of Each Exchange on Which Registered…
• FY2025 10-K: …System Agreement between CSG Systems, Inc. and Charter Communications Operating, LLC 76 10.26A* (9) Second Amendment to Consolidated CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Charter Communications Operating, LLC 10.26B* (9) Third Amendment to Consolidated CSG Master Subscriber…
• JKHY (JACK HENRY & ASSOCIATES, INC.)
• FY2025 10-K: …15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures. NOTE 2. REVENUE AND DEFERRED COSTS Revenue Recognition The Company generates revenue from data processing, transaction processing, software licensing and…
• FY2025 10-K: …revenue is generated from data and item processing services and hosting fees. The Company's arrangements for these services typically require the Company to "stand-ready" to provide specific services on a when and if needed basis. The fees for these services may be fixed or variable (based upon performing an…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.