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VeriSign (VRSN) to Report Q3 Earnings: What's in the Cards?

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VeriSign (VRSN - Free Report) is set to report third-quarter 2019 results on Oct 24.

The Zacks Consensus Estimate for third-quarter earnings has been steady at $1.31 over the past 30 days. The consensus mark for revenues is pegged at $308.3 million, indicating an increase of 0.8% from the year-ago quarter’s reported figure.

VeriSign reported second-quarter 2019 non-GAAP earnings of $1.33 per share that beat the Zacks Consensus Estimate by 4 cents and increased 12.7% from the year-ago quarter.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, with the average surprise being 10.67%.

Factors to Consider

VeriSign’s growth in .com and .net domain name registrations is likely to have benefited the company’s performance in the to-be-reported quarter.

Additionally, the company’s renewal of the .com contract and price hikes for the .com and .net domain names is likely to have contributed to the top line.

However, increasing operating expenses related to research and development and sales and marketing are likely to get reflected in the company’s third-quarter top-line performance.

VeriSign, Inc. Price and EPS Surprise

VeriSign, Inc. Price and EPS Surprise

VeriSign, Inc. price-eps-surprise | VeriSign, Inc. Quote

Key Q3 Development

On Aug 29, VeriSign announced that there were 354.7 million domain name registrations across all top-level domains (TLDs) in second-quarter 2019, up 0.8% year over year. Domain name registrations grew 14.9 million or 4.4% year over year.

Notably, the company anticipates the renewal rate for second-quarter 2019 to be about 74% compared with 75% in the year-ago quarter. Renewal rates are not fully measurable until 45 days from the end of the quarter and the figure is expected to be updated on the third-quarter earnings call.

What Our Model Says

According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of a positive earnings surprise.

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 couple of stocks you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat.

Commvault Systems (CVLT - Free Report) has an Earnings ESP of +2.66% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Silicon Motion Technology Corporation (SIMO - Free Report) has an Earnings ESP of +11.72% and a Zacks Rank #2.

Facebook has an Earnings ESP of +5.01% and a Zacks Rank #3.

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