DCF Studio

    VRSN · NMS · Technology

    VeriSign, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 229.50

    Market price

    USD 308.40

    Implied upside

    -25.6%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 25.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 229.50-25.6%
    Exit multiple
    USD 300.80-2.5%
    Market price
    USD 308.40

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 1.8bnUSD 1.9bnUSD 2.1bnUSD 2.3bnUSD 2.5bnUSD 2.6bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bn+6.4%
    EBITUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bn+6.4%
    NOPATUSD 934.0mUSD 1.0bnUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bn+6.4%
    Add depreciation & amortisationUSD 46.2mUSD 51.0mUSD 55.8mUSD 60.5mUSD 65.0mUSD 69.2mUSD 72.9mUSD 76.2mUSD 78.9mUSD 80.8m+6.4%
    Less capital expenditureUSD -35.9mUSD -45.7mUSD -56.6mUSD -68.5mUSD -81.3mUSD -94.7mUSD -108.5mUSD -122.4mUSD -136.0mUSD -148.9m+17.1%
    Capex, % of revenue2.0%2.4%2.7%3.0%3.3%3.6%3.9%4.2%4.5%4.8%-
    Less increase in working capitalUSD 354.0kUSD 630.4kUSD 629.9kUSD 616.9kUSD 590.5kUSD 550.1kUSD 496.0kUSD 428.5kUSD 348.9kUSD 258.9k+3.4%
    Free cashflow to firmUSD 944.6mUSD 1.0bnUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bn+5.8%
    Discount factor0.96220.89070.82460.76330.70670.65420.60560.56060.51900.4805-
    Present valueUSD 908.9mUSD 923.7mUSD 930.1mUSD 928.1mUSD 917.5mUSD 898.8mUSD 872.2mUSD 838.5mUSD 798.4mUSD 752.9m-
    Present Value Of The ForecastUSD 8.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.779Reported 0.670, pulled toward 1.0 (Blume)
    Cost of equity8.19%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 27.7bn93.9% of capital
    Total debtUSD 1.8bn6.1% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.02%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 229.50

    61% of EV

    Forecast FCFF, final year
    USD 1.6bn
    Capex at depreciation, working capital in reinvestment
    USD 1.6bn
    Less reinvestment at g/ROIC (4.2% of NOPAT)
    USD -68.1m
    Capitalised
    USD 1.6bn
    ROIC (reported)
    60.0%
    Terminal value, undiscounted
    USD 29.1bn
    Terminal value, discounted
    USD 14.0bn
    Enterprise value
    USD 22.7bn
    Less net debt
    USD 1.2bn
    Equity value
    USD 21.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 300.80

    70% of EV

    Terminal value, undiscounted
    USD 43.0bn
    Terminal value, discounted
    USD 20.7bn
    Enterprise value
    USD 29.4bn
    Less net debt
    USD 1.2bn
    Equity value
    USD 28.2bn

    Spread between methods: 27%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.02%309.27335.15368.48412.96475.22
    7.02%249.63264.88283.59307.03337.22
    8.02%208.36218.03229.50243.32260.26
    9.02%178.14184.57192.04200.79211.18
    10.02%155.07159.51164.57170.39177.15

    Outlined: this model. Green text: above today's price of 308.40. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year5.2%6.4%9.8%
    EBIT margin67.9%67.2%89.1%
    Discount rate-8.0%6.7%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.