VeriSign met earnings estimates for the fourth quarter Thursday after the close. VeriSign stock broke out on Friday.
In the final days of 2024, Warren Buffett-led Berkshire Hathaway bulked up its stake in the internet domain-name registry company, filings showed. Buffett scooped up shares of the underperforming S&P 500 stock — which has surged since news of Berkshire's rising stake.
In January, Citi analysts named the internet stock a 2025 top pick, highlighting its "utilitylike nature." Buffett's other internet stock bet, Amazon.com, also reported Thursday after the close.
VeriSign Earnings And Outlook
For Q4, VeriSign earnings slumped 23% to $2 per share, in line with FactSet analyst views. Revenue rose 3.9% to $395 million, also meeting estimates. That marked the first earnings decline since Q2 2021, according to FactSet.
Verisign processed 9.5 million new domain name registrations during the quarter vs. 9 million in the year-ago quarter, the earnings release showed. But total domain name registrations fell 2% to 169 million from the end of Q4 2023.
For 2025, analysts expect VeriSign earnings per share to climb 7%, FactSet shows. A weak Q4 was expected to lead to muted 1% growth in 2024, following a 23% earnings jump in 2023.
VeriSign Stock Breaks Out
Shares of VeriSign stock gained 0.6% to 221.39 in Friday's stock market action, above all the shorter- and longer-term moving averages. VeriSign stock topped a 220.91 buy point from a saucer-shaped base, the weekly MarketSurge chart shows. The breakout came in the biggest weekly volume since the base began to form in mid December.
On a daily chart, VeriSign is extended from a 202.74 saucer-with-handle buy point.
The relative strength line is improving after a slide, but it remains far below the consolidation peak. A rising RS line, the blue line in the chart provided, shows that a stock is outperforming the S&P 500.
Amazon stock fell 4% on Friday. The tech giant gave a weaker-than-expected outlook on Thursday.
Warren Buffett's Internet Stock Bet Is 'Like A Utility'
After the Q4 increase, Warren Buffett's VeriSign stake is now worth about $2.7 billion. Berkshire owns nearly 14% of total outstanding shares.
Businesses like VeriSign, too. The company has benefited from demand for domain name registrations as businesses grow their online platforms.
In early January, Citi analysts named VeriSign stock a "top pick" for 2025.
"We view VeriSign as being one of the safer plays in Internet with a narrower range of outcomes given its almost utility-like nature as a domain registry," Citi analysts said.
They highlighted its "ability to pass on regular price increases that leads to a resilient top line." They added that best-in-class EBITDA margins provide "an attractive risk/reward for investors."
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
