Verisign

Methodology

VeriSign's fair value calculation works exceptionally well given the company's remarkably stable earnings growth driven by the monopoly-like .com and .net domain registry business with predictable renewal rates. The method captures VeriSign's position as the exclusive operator of critical internet infrastructure with consistent cash flows and minimal capital requirements. Fair value estimates are highly reliable because the business model is essentially a regulated utility with contractual pricing power and steady domain base growth.

Methodology

VeriSign typically commands premium PEG ratios reflecting its unassailable competitive moat as the sole .com registry operator, with steady growth from domain additions and contractual price increases. The PEG framework works well for VeriSign because growth rates are highly predictable, supported by internet expansion and contractual pricing mechanisms. Comparing VeriSign's PEG to utility-like technology infrastructure companies provides context, as the business operates more like essential infrastructure than a typical technology company.

Methodology

VeriSign pays no dividend, as management prioritizes aggressive share buybacks to return excess cash while maintaining the domain registry infrastructure. PEGY therefore equals PEG with no yield component, reflecting the company's buyback-focused capital allocation strategy. For VeriSign investors, evaluating the pace of share repurchases and domain base trends matters more than dividend income, as buybacks have dramatically reduced the share count over time.