Yahoo Finance VeriSign, Inc. Just Recorded A 19% EPS Beat: Here's What Analysts Are Forecasting Next
As you might know, VeriSign, Inc. (NASDAQ:VRSN) recently reported its quarterly numbers. Revenues were US$318m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$1.49 were also better than expected, beating analyst predictions by 19%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for VeriSign
Taking into account the latest results, the most recent consensus for VeriSign from four analysts is for revenues of US$1.35b in 2021 which, if met, would be an okay 7.3% increase on its sales over the past 12 months. Statutory earnings per share are expected to sink 18% to US$5.71 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.34b and earnings per share (EPS) of US$5.69 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$223. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on VeriSign, with the most bullish analyst valuing it at US$260 and the most bearish at US$154 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting VeriSign's growth to accelerate, with the forecast 7.3% growth ranking favourably alongside historical growth of 3.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. So it's clear that despite the acceleration in growth, VeriSign is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that VeriSign's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$223, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for VeriSign going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with VeriSign (including 1 which is a bit unpleasant) .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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