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VeriSign (VRSN) to Report Q2 Earnings: What's in the Cards?
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VeriSign (VRSN - Free Report) is set to report second-quarter 2020 results on Jul 23.
The Zacks Consensus Estimate for second-quarter earnings has remained steady at $1.24 per share over the past 30 days, implying 6.8% decline from the figure reported in the year-ago quarter.
The consensus mark for revenues is pegged at $312.4 million, indicating an increase of 2% from the year-ago quarter reported figure.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average surprise being 4.12%.
Let’s see how things have shaped up for the upcoming announcement.
Growth in .com and .net domain name registrations is likely to have benefited the company’s performance in the to-be-reported quarter.
Notably, VeriSign has been benefiting from its “exclusive” contract with The Internet Corporation for Assigned Names and Numbers (ICANN) for .com, .net and .name generic top-level domains (gTLDs).
On Mar 27, Verisign entered into the Third Amendment to the .com Registry Agreement with ICANN which, among other changes, permitted Verisign to increase the price of .com domain name registrations by up to 7% over the previous year, in each of the final four years of each six-year period. The first such six-year period began on Oct 26, 2018.
Notably, ICANN is not a price regulator and depends on the U.S. government for .com prices. The price increase from the current wholesale price of $7.85 to the maximum price of $10.26 in 2024 indicates annual increase of $2.41.
In view of the COVID-19 crisis, Verisign announced on Mar 25 freezing of registry prices for all its Top-Level Domains (TLDs), including .com and .net, through the end of 2020.
Notably, the company ended first-quarter 2020 with 160.7 million .com and .net domain name registrations, up 3.8% year over year. The figure reflects a net increase of 1.8 million registrations during the quarter.
VeriSign processed 10 million new domain name registrations for .com and .net compared with 9.8 million in the year-ago quarter. Markedly, renewal rates are not fully measurable until 45 days after the end of the quarter.
Per VeriSign’s latest The Domain Name Industry Brief report, domain name registrations increased 4.5 million or 1.2% sequentially to 366.8 million across top-level domains (TLDs) at the end of first-quarter 2020. Domain name registrations increased 14.9 million or 4.2% year over year.
However, increasing operating expenses related to research and development and sales and marketing are likely to have weighed on the company’s second-quarter bottom-line performance.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Verisign has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Shopify (SHOP - Free Report) has an Earnings ESP of +74.2% and a Zacks Rank of 2.
NXP Semiconductors N.V. (NXPI - Free Report) has an Earnings ESP of +11.9% and holds a Zacks Rank of 2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Bigstock
VeriSign (VRSN) to Report Q2 Earnings: What's in the Cards?
VeriSign (VRSN - Free Report) is set to report second-quarter 2020 results on Jul 23.
The Zacks Consensus Estimate for second-quarter earnings has remained steady at $1.24 per share over the past 30 days, implying 6.8% decline from the figure reported in the year-ago quarter.
The consensus mark for revenues is pegged at $312.4 million, indicating an increase of 2% from the year-ago quarter reported figure.
Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average surprise being 4.12%.
Let’s see how things have shaped up for the upcoming announcement.
VeriSign, Inc. Price and EPS Surprise
VeriSign, Inc. price-eps-surprise | VeriSign, Inc. Quote
Factors to Note
Growth in .com and .net domain name registrations is likely to have benefited the company’s performance in the to-be-reported quarter.
Notably, VeriSign has been benefiting from its “exclusive” contract with The Internet Corporation for Assigned Names and Numbers (ICANN) for .com, .net and .name generic top-level domains (gTLDs).
On Mar 27, Verisign entered into the Third Amendment to the .com Registry Agreement with ICANN which, among other changes, permitted Verisign to increase the price of .com domain name registrations by up to 7% over the previous year, in each of the final four years of each six-year period. The first such six-year period began on Oct 26, 2018.
Notably, ICANN is not a price regulator and depends on the U.S. government for .com prices. The price increase from the current wholesale price of $7.85 to the maximum price of $10.26 in 2024 indicates annual increase of $2.41.
In view of the COVID-19 crisis, Verisign announced on Mar 25 freezing of registry prices for all its Top-Level Domains (TLDs), including .com and .net, through the end of 2020.
Notably, the company ended first-quarter 2020 with 160.7 million .com and .net domain name registrations, up 3.8% year over year. The figure reflects a net increase of 1.8 million registrations during the quarter.
VeriSign processed 10 million new domain name registrations for .com and .net compared with 9.8 million in the year-ago quarter. Markedly, renewal rates are not fully measurable until 45 days after the end of the quarter.
Per VeriSign’s latest The Domain Name Industry Brief report, domain name registrations increased 4.5 million or 1.2% sequentially to 366.8 million across top-level domains (TLDs) at the end of first-quarter 2020. Domain name registrations increased 14.9 million or 4.2% year over year.
However, increasing operating expenses related to research and development and sales and marketing are likely to have weighed on the company’s second-quarter bottom-line performance.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Verisign has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
Etsy (ETSY - Free Report) has an Earnings ESP of +31.7% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify (SHOP - Free Report) has an Earnings ESP of +74.2% and a Zacks Rank of 2.
NXP Semiconductors N.V. (NXPI - Free Report) has an Earnings ESP of +11.9% and holds a Zacks Rank of 2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>