On Friday, VeriSign Inc. (NASDAQ:VRSN) shares rallied more than 5% after reporting solid fiscal third-quarter results. The company announced its most recent quarterly results Thursday after markets closed, outperforming the consensus for analyst expectations for revenue and earnings.
VeriSign posted FQ3 GAAP earnings per share of $1.40, beating the average analyst estimate of $1.37. On the other hand, revenue for the quarter increased by 5.2% from the same period a year ago to $334.24 million, slightly ahead of the average Street estimate of $332.02 million.
VeriSign shares are up just 3.84% this year despite Friday’s post-earnings spike.
Is it safe to buy VRSN shares?
From an investment perspective, VeriSign shares trade at trailing 12-month and forward P/E ratios of 40.27 and 36.11, respectively. Therefore, value investors may opt to monitor performance before betting on the stock.
In addition, analysts forecast earnings to decline slightly this year before rising at an average annual rate of about 8% over the next five years. As a result, growth investors could also decide to observe from a distance before jumping in.
Source – TradingView
Technically, VeriSign shares seem to be trading within an ascending channel formation in the intraday chart. However, the stock recently bounced off the trendline support to surge towards the trendline resistance after Friday’s spike.
Therefore, with shares moving closer to the overbought conditions of the 14-day RSI, a pullback could be imminent. As a result, investors could target downward profits at about $217.97, or lower at $213.29.
On the other hand, $225.66 and $230.34 are crucial resistance levels.
Is it too late to buy VSRN stock?
In summary, although VeriSign delivered solid FQ3 results, triggering a significant rise in the stock price, the company’s valuation multiples and growth prospects are less attractive to investors, thus limiting the upside potential.
Therefore, it could be time to take some profits off VeriSign shares.
The post Is it too risky to invest in VeriSign shares despite solid Q3 results? appeared first on Invezz.