Shares of Verisign Inc (NASDAQ:VRSN) are down 1.6% in pre-open trading Tuesday following a downgrade on Baird, which cited weaker domain growth.

Baird analysts cut the rating on the domain name giant from Outperform to Neutral and lowered their price target to $245 from $265.

“We see less upside to shares in the near term due to weaker domain growth trends, which are now running below the guided range and could drive a further reduction in domain guidance for the year,” the analysts commented.

Following a resilient start to the year, domain growth has plateaued over the past six weeks, they highlighted. The current domain count stands at 174.4 million, slightly below the projected range of +0.5-2.25% year-over-year growth, indicating an estimate of 174.7-177.7 million domain names. The sluggishness in growth is believed to stem from various factors, including 1) a decrease in sentiment among small and medium-sized businesses and fewer new business starts, and 2) a reduced contribution from China, where the reopening has fallen short of expectations.

The analysts note shares of Verisign are up 26% over the last 12 months, outperforming the 13% gain in the S&P 500.

Despite the downgrade, the analysts continue to view the stock as a safe long-term investment and a powerful FCF story.