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What's in the Cards for VeriSign (VRSN) in Q1 Earnings?

Zacks Equity Research

VeriSign VRSN is set to report first-quarter 2019 results on Apr 25.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 9.6%.

VeriSign ended fourth-quarter 2018 with 153 million .com and .net domain name registrations in the domain name base, up 4.5% year over year. The figure reflects a net increase of 1.29 million registrations.

The Zacks Consensus Estimate for first quarter earnings has remained steady at $1.24 over the past seven days. The consensus mark for revenues is pegged at $302.4 million, indicating an increase of 1.1% from the year-ago quarter reported figure.

VeriSign, Inc. Price and EPS Surprise

VeriSign, Inc. Price and EPS Surprise | VeriSign, Inc. Quote

Let’s see how things are shaping up for the upcoming announcement.

Factors at Play in Q1

VeriSign’s ability to hike the price for .com registrations and renewals may aid top-line growth in first-quarter 2019.

The company entered into an agreement with Department of Commerce (DOC) on Oct 26, 2018, per which VeriSign can pursue with ICANN a price increase of up to 7% for .com domain names in each of the last four years of the six-year period of the Registry Agreement.

Additionally, consistent increase in the number of com and .net domain name registrations is likely to boost revenues in the to-be-reported quarter. Notably, in the last reported quarter, the company processed 9.5 million new domain name registrations for .com and .net compared with 9 million in the year-ago quarter.

However, increasing operating expenses related to research and development and sales and marketing may prove to be a drag on margins in first-quarter 2019.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.  Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

VeriSign has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post earnings beat this quarter:

Snap Inc. SNAP has an Earnings ESP of +1.94% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fortinet, Inc. FTNT has an Earnings ESP of +1.49% and a Zacks Rank #1.

Ceridian HCM Holding Inc. CDAY has an Earnings ESP of +31.65% and a Zacks Rank #1.

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