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Cowen Raises Verisign (VRSN) PT by 26% on Signs it Could Have a Blow Out Quarter

November 18, 2015 7:52 AM EST
Get Alerts VRSN Hot Sheet
Price: $189.51 +0.22%

Rating Summary:
    4 Buy, 5 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Cowen analyst, Gregg Moskowitz, believes that with 6 weeks remaining in 4Q, VeriSign (NASDAQ: VRSN) has posted an unprecedented number of domain name adds at ~3m .com and ~800k .net, considerably ahead of guidance. The upside is believed to be coming from China. The signs of early outperformance led the analyst to raise his PT to $87 from $69.

Despite the potential for a blowout quarter, the analyst is trying to keep expectations reigned in by modeling activity falling by about 50% over the remaining six weeks of the quarter. Typically, 4Q is seasonally slow and he has very limited visibility into the current dynamics within China. If his numbers prove to be correct, unit growth could be 7.4%, compared with his prior estimate of 4.5%; essentially a 65% beat.

VRSN's ratable revenue recognition dictates that most of the 4Q net add upside will be recognized in 2016 rather than this quarter. He raised 4Q revenue and EPS to $272m and $0.80 (from $269m and $0.79). The bigger story is in 2016 where revenue and EPS increases more materially to $1.14b and $3.53 (from $1.12b and $3.37). No change to Market Perform rating.

For an analyst ratings summary and ratings history on VeriSign click here. For more ratings news on VeriSign click here.

Shares of VeriSign closed at $83.92 yesterday.



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