Verisk Analytics (VRSK) AI Stock Analysis

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Verisk Analytics

(NASDAQ:VRSK)

61Neutral

Verisk Analytics' stock score reflects a mixed financial performance with operational efficiency but concerns over declining revenues and absent cash flows. Technical indicators suggest stability, while valuation shows a high premium. The positive sentiment from the earnings call, with strong subscription growth and margin expansion, provides an optimistic outlook. Addressing financial strains and leveraging strategic initiatives will be crucial for future growth.

Positive Factors

Business Performance

Verisk's first-quarter results exceeded expectations across key metrics such as revenue, growth, and margins, indicating strong business performance.

Client Feedback

Client feedback was largely positive on Verisk, confirming its limited competitive set and favorable end-market conditions.

Innovation and Technology

Verisk upgraded its tech infrastructure and may be a gen AI beneficiary, while insurance companies have also been modernizing their tech stacks.

Negative Factors

Investor Expectations

Shares traded lower due to a lower-than-expected EPS guide and relatively heightened investor expectations.

Macroeconomic Risks

Prolonged macroeconomic weakness could negatively impact certain aspects of the company's performance.

Valuation Concerns

Valuation somewhat limits upside potential in shares.

Verisk Analytics (VRSK) vs. S&P 500 (SPY)

Market Cap

$43.29B

Dividend Yield0.52%

Average Volume (3M)1.01M

Price to Earnings (P/E)45.3

Beta (1Y)0.45

Revenue Growth7.47%

EPS Growth59.46%

CountryUS

Employees7,800

SectorIndustrials

Sector Strength83

IndustryConsulting Services

Share Statistics

EPS (TTM)1.73

Shares Outstanding139,884,080

10 Day Avg. Volume853,080

30 Day Avg. Volume1,009,581

Financial Highlights & Ratios

PEG Ratio10.10

Price to Book (P/B)435.45

Price to Sales (P/S)0.00

P/FCF Ratio47.05

Enterprise Value/Market Cap1.07

Enterprise Value/Revenue4.12

Enterprise Value/Gross Profit25.31

Enterprise Value/Ebitda7.69

Forecast

1Y Price Target

$316.67

Price Target Upside4.29% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering13

Verisk Analytics Business Overview & Revenue Model

Company DescriptionVerisk Analytics, Inc. provides data analytics solutions in the United States and internationally. The company provides predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, global risk analytics, natural resources intelligence, economic forecasting, commercial banking and finance, and various other fields. It operates in three segments: Insurance, Energy and Specialized Markets, and Financial Services. The Insurance segment focuses on the prediction of loss, selection and pricing of risk, and compliance with their reporting requirements for property and casualty customers, as well as develops machine learned and artificially intelligent models to forecast scenarios and produce standard and customized analytics that help its customers to manage their businesses, including detecting fraud before and after a loss event, and quantifying losses. The Energy and Specialized Markets segment provides data analytics for the natural resources value chain, including energy, chemicals, metals, mining, power, and renewables sectors; research and consulting services focusing on supporting customer capital allocation decisions, asset valuation and benchmarking, commodity markets, and corporate analysis; and consultancy services in the areas of business environment, business improvement, business strategies, commercial advisory, and transaction support, as well as analysis and advice on assets, companies, governments, and markets. The Financial Services segment offers benchmarking, decisioning algorithms, business intelligence, and customized analytic services to financial institutions, payment networks and processors, alternative lenders, regulators, and merchants. The company was founded in 1971 and is headquartered in Jersey City, New Jersey.

How the Company Makes MoneyVerisk Analytics generates revenue primarily through the sale of its data analytics and risk management solutions. The company offers subscription-based services, where clients pay recurring fees for access to Verisk's data and analytical tools. Additionally, Verisk provides customized consulting services and software solutions, which contribute to its revenue streams. Key factors contributing to its earnings include long-term contracts with insurance companies for risk assessment, partnerships with energy companies for market analysis, and providing financial services firms with analytical insights. Verisk's ability to offer specialized, industry-specific solutions helps the company maintain a competitive edge and sustain its revenue growth.

Verisk Analytics Key Performance Indicators (KPIs)

Any

Insurance Revenue by Segment

Insurance Revenue by Segment
Highlights revenue from different insurance segments, providing insight into which areas drive growth and profitability, and where the company might face challenges or opportunities in the insurance market.

Chart InsightsVerisk's Insurance segment shows robust growth, with Underwriting and Rating revenue consistently rising, reflecting strong demand for data-driven solutions. The Claims segment also sees steady increases, albeit at a slower pace. The latest earnings call highlights a positive outlook with significant subscription growth and margin expansion, despite challenges in transactional revenue and severe weather impacts. The strategic acquisition of Simplitium and new analytics tools are poised to enhance Verisk's market position, offering potential for sustained growth and resilience against industry volatility.

Data provided by:

Main Street Data

Verisk Analytics Financial Statement Overview

Summary

Verisk Analytics has a mixed financial position with strong operational efficiency indicated by healthy profit margins. However, declining revenues, increased leverage, and absent cash flow data in 2024 highlight financial strains and potential liquidity issues.

Income Statement

Positive

Verisk Analytics shows a mixed performance in its income statement. The gross profit margin remained healthy in 2024, and the EBIT margin indicates strong operational efficiency. However, a significant decline in total revenue in 2024 is concerning, which negatively affected the net profit margin. The negative revenue growth rate from 2023 to 2024 highlights a downturn, which might indicate market challenges or strategic realignment.

Balance Sheet

Neutral

The balance sheet reflects a high debt-to-equity ratio, suggesting a leveraged position. Despite the decline in stockholders' equity, the company maintains a solid equity ratio, although it has decreased over the years. The low return on equity in 2024 indicates inefficiencies in generating profits from shareholders' investments. Overall, the balance sheet reflects financial pressure, with rising liabilities and declining equity.

Cash Flow

Neutral

The cash flow statement reveals challenges, particularly in 2024 where operating and free cash flows are absent. Historically, Verisk Analytics generated consistent free cash flows, but the lack of cash flow data for 2024 raises concerns about liquidity management and cash generation. The absence of cash flow data also limits insights into potential cash flow growth or effective capital expenditure management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.88B	2.68B	2.50B	3.00B	2.78B
	Gross Profit
1.67B	1.80B	1.67B	1.94B	1.79B
	EBIT
1.25B	1.13B	1.41B	1.00B	1.04B
	EBITDA
1.66B	1.42B	1.64B	1.16B	1.39B
	Net Income Common Stockholders
958.20M	614.60M	954.30M	666.30M	712.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
291.20M	303.90M	112.50M	280.30M	218.80M
	Total Assets
4.26B	4.37B	6.96B	7.81B	7.56B
	Total Debt
3.25B	3.10B	3.96B	3.61B	3.52B
	Net Debt
2.95B	2.79B	3.84B	3.33B	3.31B
	Total Liabilities
4.16B	4.04B	5.19B	4.97B	4.86B
	Stockholders Equity
100.10M	310.00M	1.75B	2.82B	2.70B
Cash Flow		Free Cash Flow
920.10M	830.70M	784.30M	887.30M	821.40M
	Operating Cash Flow
1.14B	1.06B	1.06B	1.16B	1.07B
	Investing Cash Flow
0.00	2.75B	301.40M	-592.00M	-595.80M
	Financing Cash Flow
-1.03B	-3.79B	-1.33B	-498.90M	-445.20M

Verisk Analytics Technical Analysis

Technical Analysis Sentiment

Positive

Last Price303.65

Price Trends

50DMA

293.11

Positive

100DMA

288.32

Positive

200DMA

280.63

Positive

Market Momentum

MACD

3.90

Negative

RSI

57.79

Neutral

STOCH

77.39

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRSK, the sentiment is Positive. The current price of 303.65 is above the 20-day moving average (MA) of 295.21, above the 50-day MA of 293.11, and above the 200-day MA of 280.63, indicating a bullish trend. The MACD of 3.90 indicates Negative momentum. The RSI at 57.79 is Neutral, neither overbought nor oversold. The STOCH value of 77.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VRSK.

Verisk Analytics Risk Analysis

Verisk Analytics disclosed 27 risk factors in its most recent earnings report. Verisk Analytics reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Verisk Analytics Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BAH	78 Outperform	$15.68B	18.46	75.34%	1.68%	14.07%	116.33%
FCN	76 Outperform	$5.65B	22.52	12.46%	―	1.59%	-16.79%
EFX	73 Outperform	$33.52B	55.12	12.83%	0.58%	7.12%	9.05%
TRU	72 Outperform	$16.80B	46.13	8.68%	0.50%	8.85%	―
Sector *	64 Neutral	$4.30B	11.88	5.23%	249.82%	4.12%	-10.27%
EXPO	62 Neutral	$3.89B	37.50	25.87%	1.49%	3.27%	3.94%
VRSK	61 Neutral	$43.29B	45.32	475.86%	0.52%	7.47%	59.46%

* Industrials Sector Average

Performance Comparison

VRSK

Verisk Analytics

309.50

64.60

26.38%

BAH

Booz Allen

124.67

-24.91

-16.65%

EFX

Equifax

276.37

33.11

13.61%

EXPO

Exponent

76.67

-16.90

-18.06%

FCN

FTI Consulting

164.91

-57.88

-25.98%

TRU

TransUnion

91.71

13.66

17.50%

Verisk Analytics Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 2.52%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive sentiment with strong revenue and subscription growth, margin expansion, and strategic initiatives driving value. However, challenges in transactional revenue, marketing solutions, and severe weather impacts present some concerns.

Q1-2025 Updates

Positive Updates

Strong Revenue and Subscription Growth

First quarter revenue was $753 million, up 7% year-over-year, with organic constant currency revenue growth of 7.9% driven by 10.6% subscription growth.

Margin Expansion

Adjusted EBITDA margin increased by 130 basis points to 55.3%, reflecting strong sales leverage and cost discipline.

Insurance Industry Profitability

The insurance industry returned to profitability in 2024 with an underwriting gain of $25 billion, marking the first gain in 4 years.

Advanced Data and Analytics Initiatives

Introduction of new tools such as the Actuarial Hub and Verisk Synergy Studio, enhancing data insights and connectivity for clients.

Successful Strategic Acquisition

Acquisition of Simplitium from NASDAQ, adding over 300 third-party models to the Extreme Events business.

Negative Updates

Transactional Revenue Decline

Transactional revenues, comprising 17% of total revenues, declined 4% on an organic constant currency basis.

Challenges in Marketing Solutions

Headwinds in economically sensitive client segments, particularly financial services and mortgages, impacting Marketing Solutions.

Impact of Severe Weather Events

Second worst year for catastrophic losses since 1950, with wildfires estimated to result in $28 billion to $35 billion in insurance losses.

Higher Interest Expenses

Net interest expense increased to $36 million from $29 million in the prior year due to higher debt balances and interest rates.

Company Guidance

During Verisk's First Quarter 2025 Earnings Results Conference Call, the company provided guidance for the year, expecting consolidated revenue to range from $3.03 billion to $3.08 billion. Adjusted EBITDA is projected between $1.67 billion and $1.72 billion, with adjusted EBITDA margins anticipated between 55% and 55.8%. The effective tax rate is estimated to be between 23% and 25%, and adjusted earnings per share are forecasted to be in the range of $6.80 to $7.10. The company emphasized strong first-quarter performance with 7.9% organic constant currency revenue growth, driven by a 10.6% increase in subscription revenues and a 9.5% growth in OCC adjusted EBITDA. Additionally, Verisk noted a 130 basis point margin expansion, showcasing its focus on cost discipline and emphasizing its commitment to consistent and predictable growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.