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Strength Seen in VeriSign (VRSN): Can Its 3.8% Jump Turn into More Strength?

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VeriSign (VRSN - Free Report) shares ended the last trading session 3.8% higher at $220.75. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 2.1% gain over the past four weeks.

The increase in share price can be attributed to robust growth in the company’s .com and .net domain name registrations. The renewal of the .com contract and price hikes for the .com and .net domain names remain key catalysts for VeriSign.

VeriSign ended the last reported quarter with 173.4 million .com and .net domain name registrations, up 5% year over year. The company processed 10.6 million new domain name registrations for .com and .net compared with 10.5 million in the year-ago quarter. Further, VeriSign is also benefiting from its solid liquidity and cash-flow generation ability.

This internet infrastructure services provider is expected to post quarterly earnings of $1.39 per share in its upcoming report, which represents a year-over-year change of +4.5%. Revenues are expected to be $343.12 million, up 6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For VeriSign, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on VRSN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

VeriSign belongs to the Zacks Internet - Software and Services industry. Another stock from the same industry, HUYA Inc. Sponsored ADR (HUYA - Free Report) , closed the last trading session 11.8% higher at $5.30. Over the past month, HUYA has returned -17.9%.

For HUYA Inc. Sponsored ADR, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.23. This represents a change of -221.1% from what the company reported a year ago. HUYA Inc. Sponsored ADR currently has a Zacks Rank of #3 (Hold).


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