Warren Buffett is known for advising investors to stay within their limits, which means not buying or even considering businesses or industries that the investor cannot understand. He also said he missed out on a lot of big opportunities in the tech sector because he didn’t fully understand the industry dynamics.
VeriSign today
As of 01/10/2025 16:00 Eastern
- 52 week range
- $167.04
▼
$213.68
- P/E ratio
- 24.08
- Target price
- $244.00
However, being an endless student of the game, he decided to focus some of his resources on the future of the global economy. What many call the maker economy, or the digital economy, is becoming an increasingly significant factor in today’s investing trends, and it’s something that Buffett successfully spotted—and fully understood—in his recent purchase.
After purchasing shares VerySign Inc. NASDAQ: VRSNWarren Buffett seems to have found his version of the best value stocks that will be involved in the future of global digitalization of the economy and where more and more participants will look to create an online presence and audience. Here’s why it’s not too late to take advantage of Buffett’s idea and why VeriSign makes a lot of sense as a potential buy today.
VeriSign Stock: A Building Block of the Digital Economy
Given this new economic trend, investors are considering several players, and for good reason. For example, Apple Inc. NASDAQ:AAPL acts as a hardware provider for these new creators and collaborators so they can set up a “shop” via iPhones and laptops.
Then, Alphabet Inc. NASDAQ: GOOGLE provides the infrastructure to connect buyers and sellers with needs and services, which is absolutely necessary in this topic. However, there is a middleman in this trend that has not been mentioned, and that is the licensing or domain aspect.
Investors can think of VeriSign as a real estate developer, where land (equipment) can only be turned into an income-producing home (online business) through development. This is where VeriSign and its domain registration and security services come into play for the content economy.
This may be why Buffett saw enough potential in the company’s future to consider buying it. However, it appears that Buffett isn’t the only one willing to share his optimism about the stock’s potential growth, as Nordea Investment Management has decided to increase its stake in the company to $81 million as of January 2025.
Now that the stock is trading at a new 52-week high, investors may be wondering whether to buy it now or wait for a potential pullback that would see the company’s price relatively lower.
Wall Street is bullish on VeriSign stock today
The answer to whether VeriSign stock is too high right now can be found not only in Buffett’s purchase, but also in how Wall Street analysts are looking at the stock right now. For example, representatives of Robert W. Baird decided to upgrade the stock from neutral to outperform.
VeriSign stock forecast for today
$244.00
Growth potential 17.83%Buy
Based on ratings of 3 analysts
| High forecast | US$250.00 |
|---|---|
| Average forecast | $244.00 |
| Low forecast | $238.00 |
VeriSign Stock Forecast Details
Along with this new rating comes a new valuation that previously valued the stock at $200; now, as of December 2024, the new targets are closer to $250 per share. To prove this new point correct, shares would have to rise as much as 19% from today’s levels.
The benefit for investors is that VeriSign isn’t widely covered by analysts. This means that following buying from Buffett and other institutional investors, new analyst ratings could point to even more upside potential for the stock in the coming months.
Next comes Warren Buffett’s favorite part: discounting stocks. With a price-to-earnings (P/E) ratio of just 26.4x, VeriSign offers a significant discount to the computer sector’s average valuation of 239.0x. Investors will soon be able to note that insiders are also recognizing this discount.
Based on its latest quarterly results, VeriSign management decided to repurchase $1.1 billion worth of shares, sending a signal to the broader markets that the stock is cheap today and is expected to rise soon.
More attractive, however, is free cash flow (operating cash flow minus capital expenditures) of $852 million for the year, which isn’t a common feat for a relatively young company like VeriSign, but is one of the key financial metrics driving the future. potential increase in share price as well as company valuation.
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