VeriSign, Inc.VRSN is set to report third-quarter 2015 results on Oct 22. Let's see how things are shaping up for this announcement.
Factors to Consider
Verisign reported year-over-year growth in both its top and bottom line in the last reported quarter.
Going ahead, the renewal of the .com contract and price hikes for the .com and .net domain names remain drivers of VeriSign's top-line growth. VeriSign will be increasing .net fees to $7.46 from $6.79, from Feb 1, 2016, which is expected to be accretive to its long-term revenue growth. In addition, an expected increase in the domain name base will remain a key driver of its growth.
Also, we believe that gTLD prospects, international expansion through IDNs and investments in intellectual properties will boost results over the long run. Additionally, VeriSign has significant growth opportunities in its network security products. We are optimistic about VeriSign's Network NIA services business. VeriSign's partnership with Juniper Networks, Inc. JNPR will boost its growth in the fast growing Distributed Denial of Service (DDoS) security market.
However, the negative impact of search engine adjustments on domain monetization and increasing operating expenses related to marketing remain the primary headwinds in the near term. Moreover, intensifying competition in the NIA segment is a major concern.
VeriSign has a Zacks Rank #3 (Hold).
Stocks to Consider
Here are some stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:
Fiserv, Inc. FISV with an Earnings ESP of +3.09% and a Zacks Rank #2 (Buy).
Apple Inc. AAPL with an Earnings ESP of +1.60% and a Zacks Rank #3.