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Berkshire Hathaway increased its stake in VeriSign, its largest Internet stock holding, in the final days of 2024.
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VeriSign, a domain registrar, is poised for 2025 growth with a $238 price target from Citi.
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VeriSign is one of the most profitable companies in the S&P 500.
Berkshire Hathaways The largest Internet stock has been named a “top pick” for 2025 by analysts at Citi.
VeriSign is Berkshire Hathaway’s largest Internet stock and conglomerate increased its stake in the final days of 2024.
Warren Buffett’s conglomerate owns a $2.7 billion stake VeriSign and is the company’s largest shareholder, owning nearly 14% of the company.
VeriSign provides domain registration and listing services and operates key Internet infrastructure. Founded in 1995, the company is the sole registry for .com and .net domains and operates two of the 13 global Internet root servers.
VeriSign is primed for a solid 2025, according to Citi analysts. Citi has set a price target of $238, representing a potential upside of 16% from current levels. In their bull case scenario, Citi expects VeriSign to rise to $312, representing a potential upside of just over 50%.
“We consider Verisign to be one of the safer companies on the Internet with a narrower range of results because as a domain registrar it is almost like a utility company, can pass on regular price increases, resulting in stable sales, and the best result.” “The In our opinion, EBITDA margins of this class offer an attractive risk-reward ratio for investors,” says Citi.
VeriSign is one of the most profitable companies in the world S&P 500.
According to the third quarter financial data, the company ranks fifth S&P 500 the highest profit margin at around 56%, on par with Nvidia. VeriSign ranks third in operating margin and 13th in gross margin.
Citi said it was encouraged by recent monthly growth in .Com domain registrations, which could suggest annual growth in 2025.
“If trends continue to stabilize in this way and price questions are now in the background, VRSN’s discount to its all-time high will become more of a bullish driver,” Citi said.
VeriSign has had a difficult year: its shares rose just 2%, compared to a 23% gain for the S&P 500. Meanwhile, the stock is down about 20% from its record high in December 2021.
This means VeriSign is trading at a price-to-earnings ratio of around 24, which is the historical average over the last 15 years. VeriSign’s price-to-earnings premium compared to the S&P 500 is 27% below its 15-year average and 52% below its peak.
