Verisign (VRSN) stock soared after a federal agency granted the domain-name company rights to hike prices over the last four years of its government contract.
XThe amended contract from the Commerce Department's National Telecommunications and Information Administration "enables Verisign to increase dot-com prices by 7% in each of the last four years of the six-year term of the dot-com registry agreement," Baird analyst Rob Oliver said in a report to clients.
"Pricing on dot-com has been frozen since 2012, and these new pricing terms should be a key driver," added Oliver. He upgraded Verisign stock to outperform on Friday.
Verisign stock catapulted 17.2% higher to close at 165.02 on the stock market today. The company also sells security services, aside from managing domain names.
Verisign can begin its first round of price increases on Oct. 26, 2020.
Oliver went on to say, "Beyond 2024, Verisign would only need to seek Department of Commerce approval if it wanted to change the pricing terms announced today. Said another way, Verisign could chose to renew a similar contract (with price increases in last four of six-year contract) through 2030."
Verisign's September quarter revenue rose 5% to $305.8 million. Profit increased 23% to $1.23 a share.
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The post Verisign Stock Jumps As Internet Domain Contract Provides Price Hikes appeared first on Investor's Business Daily.
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