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VeriSign, Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Software - InfrastructureSector: Technology

Fair Value Summary

Current Price$242.25
5Y Range156.85 – 244.66
5Y Selected200.76
(-) Safety Margin28.61%
5Y Buy Price$143.32
Upside (to Buy Price)-40.84%
10Y Range171.82 – 259.82
10Y Selected215.82
(-) Safety Margin28.61%
10Y Buy Price$154.07
Upside (to Buy Price)-36.40%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9945
Revenue R2 (10Y)0.9655
Net Income R2 (5Y)0.0047
Net Income R2 (10Y)0.8120
EBITDA R2 (5Y)0.9696
EBITDA R2 (10Y)0.9390
FCF R2 (5Y)0.9458
FCF R2 (10Y)0.8624
Safety Score0.7139

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth8.23%7.76%7.29%6.82%6.35%5.88%5.41%4.94%4.47%4.00%
Revenue1,685.561,816.341,948.742,081.622,213.792,343.962,470.752,592.802,708.702,817.05
EBITDA1,174.301,265.421,357.661,450.241,542.321,633.001,721.341,806.371,887.111,962.60
D&A-63.65-68.59-73.59-78.61-83.60-88.51-93.30-97.91-102.29-106.38
EBIT1,110.651,196.831,284.071,371.631,458.721,544.491,628.041,708.461,784.831,856.22
Pro forma Taxes-179.42-193.34-207.44-221.58-235.65-249.51-263.00-276.00-288.33-299.87
NOPAT931.231,003.491,076.631,150.051,223.071,294.981,365.041,432.471,496.491,556.35
Capital Expenditures-69.98-75.41-80.90-86.42-91.91-97.31-102.58-107.64-112.45-116.95
NWC Investment96.6898.6699.87100.2599.7098.1995.6592.0787.4381.73
(+) D&A63.6568.5973.5978.6183.6088.5193.3097.91102.29106.38
Free Cash Flow1,021.581,095.331,169.191,242.481,314.471,384.371,451.411,514.801,573.751,627.51
Diluted Shares Outstanding94,525,000.0094,525,000.0094,525,000.0094,525,000.0094,525,000.0094,525,000.0094,525,000.0094,525,000.0094,525,000.0094,525,000.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.451.452.463.464.465.466.467.468.46
Valuation Date1/17/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.48%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF1,012.721,053.241,030.511,002.91972.53938.84902.22863.10821.91779.10
Raw: 20,363.56
14,424.45
Raw: 25,213.26
11,555.55

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value19,496.3520,932.62
(-) Net Debt1,460.151,460.15
Equity Value18,036.2019,472.47
(/) Shares Out94.5394.53
Fair Value$190.81$206.00
(-) Safety Margin28.61%28.61%
Buy Price$136.22$147.07
Current Price$242.25$242.25
Upside (to Buy Price)-43.77%-39.29%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.98%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF1,011.801,048.921,016.96980.65942.31901.40858.37813.69767.82721.22
Raw: 16,518.63
11,285.67
Raw: 20,452.64
8,637.85

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value16,286.3117,701.00
(-) Net Debt1,460.151,460.15
Equity Value14,826.1616,240.85
(/) Shares Out94.5394.53
Fair Value$156.85$171.82
(-) Safety Margin28.61%28.61%
Buy Price$111.97$122.66
Current Price$242.25$242.25
Upside (to Buy Price)-53.78%-49.37%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.98%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.890.830.760.710.650.600.560.52
PV UFCF1,013.661,057.611,044.361,025.891,004.01978.20948.74916.00880.35842.22
Raw: 26,463.47
19,441.46
Raw: 32,765.90
16,308.57

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value24,586.9926,019.61
(-) Net Debt1,460.151,460.15
Equity Value23,126.8424,559.46
(/) Shares Out94.5394.53
Fair Value$244.66$259.82
(-) Safety Margin28.61%28.61%
Buy Price$174.67$185.49
Current Price$242.25$242.25
Upside (to Buy Price)-27.90%-23.43%

Reverse DCF: Market Implied Growth

Current Price$242.25
WACC Used9.1%
IMPLIED REVENUE GROWTH172.51%
Metric2027202820292030203120322033203420352036
Implied Revenue4,432.9212,080.1332,919.5389,708.94244,465.63666,192.731,815,440.244,947,251.9513,481,744.6936,739,070.87
Constant Implied Growth172.51%172.51%172.51%172.51%172.51%172.51%172.51%172.51%172.51%172.51%
Implied Free Cash Flow0.441.213.298.9724.4566.62181.54494.731,348.173,673.91
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF0.410.982.446.0815.2037.9694.81236.83591.561,477.63

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$192.689.32%$124.44-35.42%
20182018-12-31$148.298.41%$104.89-29.27%
20172017-12-31$114.447.06%$113.66-0.68%
20162016-12-31$76.071.45%$59.43-21.87%
20152015-12-31$87.36-0.52%$64.30-26.39%
20142014-12-31$57.001.52%$62.098.93%
20132013-12-31$59.786.59%$64.027.09%
20122012-12-31$38.8214.00%$80.40107.11%
20112011-12-31$35.7216.32%$29.63-17.06%
20102010-12-31$32.6717.34%$29.09-10.95%
20092009-12-31$24.2418.22%$51.40112.07%
20082008-12-31$19.088.07%$36.8593.14%
20072007-12-31$37.611.23%$21.74-42.19%
20062006-12-31$24.05-8.39%$13.54-43.70%
20052005-12-31$21.90-11.97%$13.70-37.43%
20042004-12-31$33.60-5.82%$13.40-60.11%
20032003-12-31$16.300.99%$20.0022.68%
20022002-12-31$8.028.38%$7.02-12.41%
20012001-12-31$38.046.93%$-13.75-136.14%
20002000-12-31$74.194.11%$17.97-75.78%
19991999-12-31$190.948.98%$2.61-98.64%
19981998-12-31$14.7840.56%$-13.82-193.53%
19971997-12-31$6.3865.57%$-38.80-708.19%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$210.96
Median
$204.38
10th Percentile
$170.01
90th Percentile
$259.38

Fair Value Distribution

$138.20 - $153.24
18
$153.24 - $168.29
68
$168.29 - $183.33
148
$183.33 - $198.38
187
$198.38 - $213.43
168
$213.43 - $228.47
134
$228.47 - $243.52
114
$243.52 - $258.56
61
$258.56 - $273.61
44
$273.61 - $288.66
22
$288.66 - $303.70
17
$303.70 - $318.75
4
$318.75 - $333.79
6
$333.79 - $348.84
4
$348.84 - $363.89
0
$363.89 - $378.93
1
$378.93 - $393.98
0
$393.98 - $409.02
1
$409.02 - $424.07
1
$424.07 - $439.12
2