) is expected to announce its fiscal year 2011 Q2 earnings on July
28. We currently have a
Trefis price estimate for Verisign
, which implies around 15% upside to the current market price.
Verisign recently renewed its contract with ICANN, which cements
its position as the exclusive .com and .net domain registrar. It
currently competes with other domain name registry providers like
NeuStar, Employ Media, and Afilias to win new and maintain existing
registry rights from ICANN. The company is also followed by
investors in Internet security names like Symantec (
) and Intel's Mcfee (
) as well as CDN provider Akamai (
While the percentage market share of .com and .net domain names
is expected to decrease, the number of total domain names is
expected to increase by a much higher percentage and is expected to
reach almost 340 million by the end of the Trefis forecast period.
The expected increase in domain registrations should improve
Verisign's top line growth.
The company has also announced an increase in domain name
prices, hiking .com prices by 7% and .net prices by 10% as
expected. This should help it improve operating profit margins in
the short term. The price increase is expected to lead to only a
marginal decrease in the number of .com and .net domain name
registrations, as the hike isn't substantial.
In line with its Q1 results, we expect Verisign to post positive
results, improving its margins and increasing its net income faster
Check out our complete analysis of VeriSign