VeriSign testing 52-week moving average ahead of earnings
The next earnings season is right around the corner. Over the next four weeks or so we will get earnings reports from well over half of the companies in the S&P 500. One company that will be reporting is VeriSign (Nasdaq: VRSN), the internet registry and infrastructure firm. The company is scheduled to release third quarter earnings results on October 24.
Before the company gets to that earnings release, the stock is facing some key support at its 52-week moving average. The stock hasn’t closed a week below that trend line since early 2017. Over the last two weeks the stock has dipped below the 52-week, but it hasn’t closed below it yet.
We see that the weekly stochastic readings are in oversold territory and at their lowest levels in the last three and a half years. The indicators did make a bullish crossover recently and such moves have been a good sign for the stock in the past.
The 10-week RSI isn’t in oversold territory yet, but it is at its lowest point since August of 2016.
Looking at some of the daily indicators, the 10-day RSI exited the oversold zone last week and that indicates that VeriSign price is in a transition from a downtrend to an uptrend. According to Tickeron, in 5 of 6 cases where the RSI Indicator exited the oversold zone, the price rose further within the following month. The odds of a continued uptrend are 83%.
We also see that the lower Bollinger Band was broken last week and that suggests a price increase is expected as the ticker heads toward the middle band. The Tickeron Technical Analysis Overview points out that in 21 of 33 cases where VeriSign's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued uptrend are 64%.
Looking at VeriSign’s fundamental indicators, the company has seen earnings grow by 17% per year over the last three years and they grew by 13% in the second quarter. Sales have been relatively flat, only growing by 3% per year over the last three years. The company does boast a profit margin of 65.4% and that is well above average.
The Tickeron Valuation Rating of 9 indicates that the company is seriously undervalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
The Tickeron Profit vs. Risk Rating for VeriSign is 13 and that indicates low risk on high returns. The average Profit vs. Risk Rating for the industry is 86, placing this stock well better than average.
As for the sentiment toward VeriSign, we see a bit of mixed picture. There are only four analysts covering the stock which I find to be extremely low for a company that has been around since 1995 and trades over 600,000 shares a day on average. As for the ratings, there is one “buy” rating, two “hold” ratings, and one “sell” rating. This leaves plenty of room for additional coverage and upgrades.
The short interest ratio is currently at 1.79 and that is on the low side. The low ratio indicates a certain degree of optimism for the stock ahead of the earnings report.
Momentum Indicator for VRSN turns positive, indicating new upward trend
VRSN saw its Momentum Indicator move above the 0 level on December 24, 2024. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 93 similar instances where the indicator turned positive. In of the 93 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for VRSN just turned positive on December 23, 2024. Looking at past instances where VRSN's MACD turned positive, the stock continued to rise in of 44 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where VRSN advanced for three days, in of 315 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 243 cases where VRSN Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The RSI Indicator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 9 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where VRSN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. VRSN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.000) is normal, around the industry mean (31.338). P/E Ratio (23.976) is within average values for comparable stocks, (158.237). Projected Growth (PEG Ratio) (2.714) is also within normal values, averaging (2.763). Dividend Yield (0.000) settles around the average of (0.084) among similar stocks. P/S Ratio (13.123) is also within normal values, averaging (58.727).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. VRSN’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock better than average.
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General Information
a provider of internet infrastructure services
Industry PackagedSoftware