Bullish Stock to Watch: Verisign, Inc. (NASDAQ: VRSN)

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Verisign, Inc. (NASDAQ: VRSN) stock rose over 4.6% in the pre-market session of 12th Feb, 2021 (Source: Google finance) after the company posted better than expected earnings for the fourth quarter of FY 20.

Verisign has reported net income of $157 million for the fourth quarter of 2020, compared to net income of $148 million for the same quarter in 2019. Fourth quarter operating income were of total $205 million compared with $199 million in the same quarter of 2019. The operating margin was 63.9 percent for the fourth quarters were of 2020 and 2019.

During the fourth quarter, the company processed 10.5 million new registrations and the domain name base increased by 1.46 million names. Although renewal rates are not fully measurable until 45 days after the end of the quarter, the company believes that the renewal rate for the fourth quarter of 2020 will be approximately 73.5%. This preliminary rate is compared to 73.8% achieved in the fourth quarter of 2019 and 73.7% last quarter.

VRSN in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.38, while reported the adjusted revenue growth of 3.1 percent to $320.28 million in the fourth quarter of FY 20, which is inline with the analysts’ estimates for revenue of $320.28 million.

Additionally, Verisign ended 2020 with cash, cash equivalents, and marketable securities of $1.17 billion, which reflects a decrease of $51 million from year-end 2019. The company generated the cash flow from operations of $195 million for the fourth quarter of 2020 compared to $194 million for the same quarter in 2019. Deferred revenues as of Dec. 31, 2020, were of total $1.06 billion, which is an increase of $29 million from year-end 2019. During the fourth quarter of 2020, Verisign repurchased 0.8 million shares of its common stock for $170 million. Effective from Feb. 11, 2021 the company has approved an additional authorization for share repurchases of approximately $747 million of common stock, which brings the total amount to $1.0 billion authorized and available under Verisign’s share repurchase program, which has no expiration.

Looking to 2021, the company expects the domain name base growth rate of between 2.5% and 4.5%. The company has given notice of a price increase of $0.54 for the annual wholesale price for.com domain names, which raises the price from $7.85 to $8.39 effective September 1st, 2021.

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