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Berkshire Hathaway increased its stake in VeriSign in the final days of 2024, its largest Internet stock holding.
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VeriSign, a domain registry, is poised for growth in 2025 with a $238 price target set by Citi.
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VeriSign is one of the most profitable companies in the S&P 500.
Berkshire Hathaway The largest Internet stock has been called a 2025 “top pick” by Citi analysts.
VeriSign is Berkshire Hathaway’s largest Internet stock, and the conglomerate increased its stake in the last days of 2024.
Warren Buffett’s conglomerate holds a $2.7 billion stake in VeriSign and is the company’s largest shareholder, owning almost 14% of the company.
VeriSign provides domain registration and SEO services and operates critical Internet infrastructure. Founded in 1995, it is the only registry for .com and .net domains and operates two of the world’s 13 Internet root servers.
According to Citi analysts, VeriSign is poised for a strong 2025. Citi has set a price target of $238, representing a potential upside of 16% from current levels. In its bullish scenario, Citi sees VeriSign rising to $312, representing a potential upside of just over 50%.
“We view Verisign as one of the safest plays on the Internet with a narrower range of outcomes given its almost utilitarian nature as a domain registry, its ability to pass on regular price increases that lead to a d “resilient business and best-in-class EBITDA margins, offering what we view as an attractive risk/reward ratio for investors,” says Citi.
VeriSign is one of the most profitable companies in the world. S&P500.
According to financial data for the third quarter, the company ranks fifth in the ranking. S&P500 for the highest profit margin, at around 56%, tied with Nvidia. For operating margin, VeriSign is ranked third and for gross margin, it is ranked 13th.
Citi said it was encouraged by recent month-over-month growth in .com domain registrations, which could point to year-over-year growth in 2025.
“If trends continue to stabilize in this manner, and with the pricing issues now behind us, VRSN’s discount from its all-time high will become more of a bullish driver,” Citi said.
VeriSign has had a rough year, with the stock up 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 leaves VeriSign trading at a price-to-earnings ratio of around 24x, which is in line with its 15-year historical average. VeriSign’s price-to-earnings premium over the S&P 500 is 27% below its 15-year average and 52% below its peak.
