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Based in Jersey City, New Jersey, Verisk Analytics, Inc. (VRSK) provides data analytics and technology solutions to the insurance, energy, financial services, and other specialized markets. Valued at a market cap of $41.4 billion, the company offers predictive analytics and decision support solutions and draws on unique data assets and deep domain expertise to provide innovations that are integrated into customer workflows.
This data analytics company's shares have lagged behind the broader market over the past 52 weeks. Verisk has gained 19.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 22.5%. Nonetheless, the stock is up 6.5% on a YTD basis, outpacing SPX’s 4.2% rise during the same time frame.
Zooming in further, VRSK has outperformed the Industrial Select Sector SPDR Fund’s (XLI) 17.5% return over the past 52 weeks and a 5.2% gain on a YTD basis.
On Oct. 30, VRSK’s shares rose 4.5% after its stronger-than-expected Q3 earnings release. The company’s top line figure grew 7% year-over-year to $725.3 million, driven by a robust 9.1% increase in subscription revenue and slightly exceeded the consensus estimates. Additionally, its adjusted EBITDA margin expanded by a notable 120 bps, contributing to a 9% rise in adjusted earnings to $1.67 per share. The bottom line also topped the Street’s expectations of $1.60 and highlighted Verisk’s effective cost management.
For the fiscal year, which ended in December, analysts expect VRSK’s EPS to grow 16.1% year over year to $6.73. The company’s earnings surprise history is mixed. It surpassed the Wall Street estimates in three of the last four quarters while missing on another occasion.
Among the 18 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on six “Strong Buy,” two “Moderate Buy,” and 10 “Hold” ratings.
This configuration is slightly less bullish than three months ago, with seven analysts suggesting a “Strong Buy” rating.
On Jan. 21, BMO Capital Markets maintained a “Market Perform” rating on VRSK and raised its price target to $280. As of writing, the stock is trading above this price target.
The mean price target of $297.44 represents a slight 1.4% upside from Verisk’s current price levels, while the Street-high price target of $325 suggests an upside potential of 10.8%.
