VeriSign is the most dominant domain name registry business in the world. It almost has a monopoly as it exclusively enables the registration of .com and .net domains. Think of all the companies and websites in the world that end in .com and .net. The number is well above 150 million. The registration rate of new domains is also on the rise, thanks to the greater digitalization of our lives. Therefore, given the positioning of VeriSign, it is among the 2021 top software stocks. An investor looking at software stocks has plenty of options. One can look at the giants like Adobe and Microsoft or look at niche areas like video conferencing, designing software, or internet infrastructure businesses like VeriSign.
VeriSign Q22021 Earnings Results
On 22nd July 2021, VeriSign announced its second-quarter 2021 earnings numbers. The total revenue was up from $314 million in Q22020 to $329 million. Non-operating losses, however, dragged the net income lower. Earnings per share on a diluted basis came in at $1.31 as compared to $1.32 achieved in Q22020. During the second quarter of 2021, VeriSign registered 11.7 million new registrations and increased its domain name base by 2.59 million. VeriSign’s domain name base in .com and .net domains went past 170 million in the second quarter of 2021. Such scale makes VeriSign a leading player in its niche and even gives it pricing power to some extent. The company reported that it had a strong cash position, and it intends to continue its share repurchase program. If you are trying to buy best software stocks now, then companies like VeriSign can deliver regular cash flows due to the strength of their business models.
2021 Top Software Stocks
VeriSign’s stock has been trading at a P/E of around 37 to 39 in recent times. In fact, the stock has been range-bound for about two years now. From a technical standpoint, it looks like there could either be a consolidation going on, and the next move may end up being quite strong.