VeriSign (VRSN): A Breakout is in the Charts

A breakout could be imminent in VeriSign Inc. (VRSN), as the stock approaches a key level of resistance…

VeriSign Inc. (VRSN) is the sole authorized registry for several generic top-level domains, including the widely utilized .com and .net top-level domains. The company also operates two of the world’s 13 root servers that are used to route Internet traffic.

VRSN is benefiting from growth in .com and .net domain-name registrations. While the company has paused price increases for renewals due to the coronavirus pandemic, future price hikes bode well for the company. The company’s application for Internationalized Domain Names (IDN) should also expand its business.

The company has solid liquidity with $1.2 billion in cash as of the end of the last quarter and a 1.2 current ratio. Over the past five years, earnings have grown an average of 22.2%. While VRSN has a negative return on equity, its net margin is 64.2%.

VRSN has a P/E of 31.2, but a high Price to Sales ratio of 20. The stock has shown positive near-term momentum and bullish mid and long-term performance. This has led to a “Strong Buy” rating in our POWR Ratings service and is evident in its price chart.

Take a look at the 1-year chart of VRSN below with added notations…

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