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Verisk Analytics (VRSK)
NASDAQ:VRSK
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Verisk Analytics
(NASDAQ:VRSK)64Neutral
Positive Factors
Competitive Positioning
The company’s supreme competitive positioning, record of consistent growth, and margin expansion are highly valued.
Subscription Growth
Strong subscription growth reflected broad-based strength in renewals and price realization across the portfolio, aided by the conversion of transactional contracts to a subscription-based model.
Negative Factors
Earnings Projection
Shares traded lower due to a lower-than-expected EPS guide and relatively heightened investor expectations.
Verisk Analytics (VRSK) vs. S&P 500 (SPY)
Market Cap
$41.65B
Dividend Yield0.52%
Average Volume (3M)708.18K
Price to Earnings (P/E)44.3
Beta (1Y)0.61
Revenue Growth7.47%
EPS Growth59.46%
CountryUS
Employees7,500
SectorIndustrials
Sector Strength66
IndustryCorporate Services
Share Statistics
EPS (TTM)6.71
Shares Outstanding140,276,170
10 Day Avg. Volume964,357
30 Day Avg. Volume708,176
Financial Highlights & Ratios
PEG Ratio0.74
Price to Book (P/B)N/A
Price to Sales (P/S)14.75
Price to Cash Flow (P/CF)35.20
P/FCF Ratio38.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$306.40Price Target Upside2.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Verisk Analytics Business Overview & Revenue Model
Company DescriptionVerisk Analytics, Inc. is a leading data analytics and risk assessment company that provides predictive analytics and decision-support solutions to clients in various sectors, including insurance, energy, and financial services. The company's core offerings include data analytics, risk assessment, and management services designed to help businesses make informed decisions by leveraging comprehensive data sets and sophisticated analytical tools.
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 Financial Statement Overview
Summary
Verisk Analytics shows strong profitability and cash flow management, with robust revenue growth and efficient cash conversion. However, high leverage poses a risk in a rising interest environment.Income Statement
Verisk Analytics has shown solid revenue growth, with a revenue growth rate of 5.3% TTM. The gross profit margin stands at 62.8% and net profit margin at 32.6% TTM, indicating strong profitability. However, there has been a decline in gross profit from the previous annual period. EBIT margin is healthy at 42.1%, and EBITDA margin at 54.2% TTM, reflecting efficient operational management.78
Positive
Balance Sheet
The company's balance sheet shows a high debt-to-equity ratio of 10.88, indicating substantial leverage which could be a risk in a rising interest environment. Return on Equity is strong at 307.5% TTM, largely driven by high net income relative to equity. The equity ratio is low at 6.6% TTM, suggesting reliance on debt financing.65
Positive
Cash Flow
Verisk Analytics demonstrates strong cash flow management with a free cash flow growth rate of 10.3% TTM. The operating cash flow to net income ratio is 1.24, indicating good cash generation relative to reported earnings. Free cash flow to net income ratio is solid at 0.99, showing effective conversion of earnings into cash.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.82B | 2.68B | 2.50B | 3.00B | 2.78B | 2.61B | Gross Profit |
| 1.77B | 1.80B | 1.67B | 1.94B | 1.79B | 1.63B | EBIT |
| 1.19B | 1.13B | 1.41B | 1.00B | 1.04B | 696.90M | EBITDA |
| 1.53B | 1.42B | 1.64B | 1.16B | 1.39B | 1.02B | Net Income Common Stockholders |
| 921.50M | 614.60M | 954.30M | 666.30M | 712.70M | 449.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 303.90M | 303.90M | 112.50M | 280.30M | 218.80M | 184.60M | Total Assets |
| 4.37B | 4.37B | 6.96B | 7.81B | 7.56B | 7.06B | Total Debt |
| 3.10B | 3.10B | 3.96B | 3.61B | 3.52B | 3.40B | Net Debt |
| 2.79B | 2.79B | 3.84B | 3.33B | 3.31B | 3.22B | Total Liabilities |
| 4.04B | 4.04B | 5.19B | 4.97B | 4.86B | 4.79B | Stockholders Equity |
| 310.00M | 310.00M | 1.75B | 2.82B | 2.70B | 2.26B |
| Cash Flow | Free Cash Flow | ||||
| 916.20M | 830.70M | 784.30M | 887.30M | 821.40M | 739.50M | Operating Cash Flow |
| 1.14B | 1.06B | 1.06B | 1.16B | 1.07B | 956.30M | Investing Cash Flow |
| -133.40M | 2.75B | 301.40M | -592.00M | -595.80M | -927.90M | Financing Cash Flow |
| -953.30M | -3.79B | -1.33B | -498.90M | -445.20M | 10.90M |
Verisk Analytics Technical Analysis
Positive
299.54
Price Trends
284.75
Positive
282.01
Positive
274.20
Positive
Market Momentum
3.35
Negative
59.50
Neutral
91.18
Negative
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 299.54 is above the 20-day moving average (MA) of 294.47, above the 50-day MA of 284.75, and above the 200-day MA of 274.20, indicating a bullish trend. The MACD of 3.35 indicates Negative momentum. The RSI at 59.50 is Neutral, neither overbought nor oversold. The STOCH value of 91.18 is Negative, 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $162.92B | 42.86 | 11.62% | 0.70% | 13.68% | 49.90% | |
73 Outperform | $17.56B | 33.08 | 27.04% | 0.90% | 5.02% | 12.58% | |
70 Outperform | $13.45B | 36.55 | 145.86% | 0.53% | 11.60% | 161.17% | |
70 Outperform | $44.08B | 40.41 | -117.99% | 1.12% | 12.94% | -2.54% | |
64 Neutral | $41.65B | 44.26 | 1.49% | 0.52% | 7.47% | 59.46% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
47 Neutral | $1.18B | ― | 493.63% | ― | -16.75% | -33.53% |
* Industrials Sector Average
Performance Comparison
VRSK
Verisk Analytics
299.54
63.21
26.75%
FDS
Factset Research
444.72
-15.23
-3.31%
SPGI
S&P Global
516.81
97.65
23.30%
MORN
Morningstar
299.06
-4.35
-1.43%
MSCI
MSCI
567.62
23.79
4.37%
IHS
IHS Holding
3.54
1.09
44.49%
Verisk Analytics Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -0.06% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
Verisk's earnings call highlighted strong subscription growth, margin expansion, and record free cash flow, demonstrating a solid financial and operational performance in 2024. Despite challenges in transactional revenues and the auto segment, strategic pricing, innovation, and increased dividends reflect a positive outlook for 2025.Highlights
Strong Subscription Growth
Verisk delivered strong fourth quarter results with an 11% subscription growth, driven by strategic pricing and client engagement.
Organic Constant Currency Revenue Growth
The company achieved organic constant currency (OCC) revenue growth of 8.6% in Q4 and 7.1% for the full year 2024.
Margin Expansion
Adjusted EBITDA margins expanded by 120 basis points to 54.7% for the full year 2024.
Record Free Cash Flow
Verisk reported a record free cash flow of $920 million for 2024, an increase of 11% from the previous year.
Dividend Increase and Share Repurchase Authorization
The Board approved a 15% increase in dividends and an additional $1 billion in share repurchase authorization.
Lowlights
Transactional Revenue Decline
Transactional revenues declined by 1.1% on an OCC basis during the fourth quarter, influenced by a shift to subscription contracts.
Challenges with Auto Segment
The auto segment faced challenges with notable attrition, particularly within the insurtech customer segment.
Increased Interest Expense
Net interest expense increased due to higher rates, impacting the overall financial outlook with an expectation of $145 to $165 million in 2025.
Impact of California Wildfires
The recent California wildfires resulted in significant industry losses, affecting insurance market dynamics.
Company Guidance
In the fourth quarter of fiscal year 2024, Verisk reported strong financial performance, highlighted by 11% subscription growth and an 8.6% increase in organic constant currency (OCC) revenue, driven by sales momentum and storm-related activities. The company achieved 9.9% OCC adjusted EBITDA growth and a 120 basis-point margin expansion, resulting in a 16% earnings per share (EPS) growth. For 2025, Verisk provided guidance with an expected OCC revenue growth of 6% to 8%, adjusted EBITDA between $1.67 billion and $1.72 billion, and an adjusted EBITDA margin ranging from 55% to 55.8%. Additionally, Verisk plans to maintain its investment in innovation, highlighted by the introduction of new features across its digital platform, aiming for enhanced client value and sustained 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.