Citi lifts VeriSign stock price target to $250 from $246

On Tuesday, Citi analyst Ygal Arounian updated VeriSign stock’s (NASDAQ:VRSN) price target to $250, up from the previous $246, while reiterating a Buy rating on the shares. According to InvestingPro data, the stock is currently trading near its 52-week high of $217.66, with analyst targets ranging from $195 to $250. The adjustment follows VeriSign’s reported growth in its domain name base, marking the first sequential increase in 16 months, predominantly driven by a rise in .com domain registrations.

In January, VeriSign saw its total domains grow by 180.8K, despite a year-over-year decline of 2.0%. This growth was primarily due to a 257.3K surge in .com domains, offsetting a 76.6K decrease in .net domains. The company maintains impressive gross profit margins of 87.58% and has achieved revenue growth of 4.08% over the last twelve months. This recent uptick ends a 16-month period without month-over-month growth, with .com domains experiencing their first sequential growth in a year.

Arounian pointed out that after four consecutive months of moderation and improvement in .com domain trends, it appears that the previous negative patterns were more cyclical rather than long-term issues. With the pricing concerns now addressed, Citi has initiated a 90-day upside Catalyst Watch on the stock.

The analyst anticipates that registrar marketing programs and the normalization of trends in China will contribute to further improvements in VeriSign’s performance throughout 2025. This positive outlook is underpinned by the recent inflection in .com domain growth, suggesting a potential rebound from the cyclical downturn experienced by the company.

In other recent news, Berkshire Hathaway (NYSE:BRKa) has increased its investments in VeriSign, Occidental Petroleum (NYSE:OXY), and Sirius XM Holdings (NASDAQ:SIRI), reflecting confidence in these companies’ prospects. VeriSign, in particular, has been a focus of recent developments. The company renewed its .com Registry Agreement with the Internet Corporation for Assigned Names and Numbers (ICANN), maintaining the current pricing structure for .com domain names. This renewal follows the company’s Cooperative Agreement with the National Telecommunications and Information Administration (NTIA), which was also reaffirmed with existing price constraints intact. Both Baird and Citi have shown a bullish outlook for VeriSign’s stock. Baird upgraded VeriSign’s rating from Neutral to Outperform, citing pricing clarity and a favorable Free Cash Flow (FCF) outlook. Meanwhile, Citi reaffirmed its Buy rating for VeriSign, setting a price target of $210.00. Lastly, VeriSign reported a modest revenue growth of 3.8% in its third-quarter 2024 results, reaching $391 million, accompanied by a 13.1% increase in earnings per share, which rose to $2.07.

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