VeriSign stock price target raised to $330 from $294 at Citi

Citi has raised its price target on VeriSign (VRSN) to $330 from $294, maintaining a Buy rating, driven by positive domain trends, including the return of .com domains to year-over-year growth. The company reported strong Q1 2025 earnings, surpassing revenue and EPS expectations, and initiated a $0.77 quarterly cash dividend, signaling a commitment to capital return. With domain registrations approaching the high end of its fiscal year 2025 guidance, Citi anticipates VeriSign may raise its outlook in Q2, despite the company's cautious 2025 revenue projection of $1.635-1.650 billion amid macroeconomic uncertainties.

Analysis

Citigroup has upgraded its price target for VeriSign (VRSN) to $330 from $294, maintaining a Buy rating, driven by a significant inflection in the company's core business metrics. The primary catalyst is the renewed growth in domain registrations, with .com domains returning to year-over-year growth in June for the first time in 15 months, supplemented by six consecutive months of month-over-month growth. This operational turnaround is supported by robust financial health, evidenced by impressive 88% gross profit margins and a strong first-quarter 2025 earnings report that surpassed analyst expectations with revenue of $402 million (a 4.7% year-over-year increase) and an EPS of $2.10. Further bolstering investor confidence, VeriSign has initiated a $0.77 quarterly cash dividend, signaling a strong commitment to capital returns. While the company maintains a cautious official revenue guidance for 2025 of $1.635 billion to $1.650 billion, citing macroeconomic uncertainty, Citi anticipates a potential guidance increase during the next earnings report as current registration trends approach the high end of VeriSign's projections. The stock's 37% year-to-date gain reflects growing market appreciation for its pricing power, which is contractually secured for the next six years.

Key Decisions for Investors

• Given the positive inflection in domain growth, strong profitability, and new dividend, investors may consider the stock favorably as the fundamental narrative appears to be strengthening.
• Monitor the upcoming Q2 2025 earnings report closely for a potential upward revision to full-year guidance, which could serve as a significant near-term catalyst as anticipated by Citi.
• While the outlook is positive, investors should note the stock is trading near its 52-week high after a 64% return over the past year, warranting a consideration of valuation in entry-point decisions.