Verisk Analytics
VRSK
$163.28
-0.37%
Verisk Analytics is a leading data, analytics, and technology provider serving the property-casualty (P&C) insurance industry, offering underwriting solutions such as forms, rules, loss costs, and catastrophe modeling, alongside claims tools including property repair estimates and antifraud analytics. The company operates as a dominant, deeply embedded platform within its niche — its origins as the nonprofit Insurance Services Office (ISO) and its role in setting industry-standard loss costs and policy language give it a quasi-utility position in the P&C ecosystem, with roughly 83% of revenue generated in the US and a single reportable segment (Insurance). The current investor narrative is dominated by an intense debate over whether artificial intelligence will commoditize Verisk's proprietary data moat or instead reinforce its position as an AI-enabled analytics provider; this anxiety has driven a roughly 50% drawdown in the shares even as the company continues to post mid-single-digit revenue growth and sector-leading margins. Recent headlines, including Motley Fool's May 2026 piece "Will Verisk's Valuable Data Moat Hold, or Will AI Commoditize It?", capture the central tension: bulls point to a regulatory moat, immense proprietary datasets, and strong cash flow as a long-term buying opportunity, while bears worry that generative AI could erode the value of static data and analytics subscriptions.…
VRSK
Verisk Analytics
$163.28
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Investment Opinion: Should I buy VRSK Today?
We rate VRSK a Hold with a bias toward accumulation on further weakness. The analyst consensus is Buy (recommendation mean 2.05) with an average target of $234.76, implying 43.3% upside, but the stock's severe underperformance (-33.8% over one year) and unresolved AI disruption narrative warrant caution. The core thesis is that Verisk's regulatory moat and mission-critical data are likely to prove resilient, but near-term earnings pressure and premium valuation limit the margin of safety.
Supporting evidence for a constructive view includes: 1) sector-leading profitability with a 44.6% operating margin and 29.6% net margin; 2) strong free cash flow of $1.24 billion TTM, providing flexibility for buybacks or AI investment; 3) consistent revenue growth of 4.36% year-over-year in Q2 2026; and 4) a forward P/E of 18.8x, which is reasonable for a wide-moat business. However, the trailing P/E of 34.4x and price-to-sales of 10.1x are elevated, and the PEG ratio is negative due to earnings declines. The dividend yield of 0.81% is modest, and the payout ratio of 27.6% is sustainable but not a major draw.
The biggest risks that could invalidate the thesis are: 1) AI-driven commoditization leading to customer losses or pricing pressure; 2) continued earnings declines and margin compression; and 3) high leverage (debt-to-equity of 16.3x) limiting strategic flexibility. We would upgrade to Buy if the stock stabilizes above $180 and earnings growth resumes, or if the forward P/E compresses below 16x. We would downgrade to Sell if revenue growth decelerates below 3% or if operating margins fall below 40%. Relative to its history and peers, VRSK appears undervalued on a forward earnings basis but fairly valued to slightly overvalued on trailing metrics, suggesting the market is pricing in significant disruption risk.
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VRSK 12-Month Price Forecast
Verisk presents a classic value-versus-disruption debate. The company's regulatory moat, high margins, and strong cash flow are undeniable, but the market is pricing in significant AI disruption risk, as evidenced by the 33.8% one-year decline and 48.8% relative underperformance versus the S&P 500. The forward P/E of 18.8x suggests that analysts expect earnings to recover, but the negative PEG ratio and declining net income in Q2 2026 highlight near-term pressure. We maintain a neutral stance with medium confidence, recognizing that the risk/reward is balanced: the 43.3% upside to analyst targets is compelling, but the bear case of AI commoditization could lead to further downside. We would upgrade to bullish if the company demonstrates tangible AI-driven revenue growth or if the stock stabilizes above $180 with improving margins. We would downgrade to bearish if revenue growth falls below 3% or if operating margins drop below 40%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Verisk Analytics's 12-month outlook, with a consensus price target around $234.76 and implied upside of +43.8% versus the current price.
Average Target
$234.76
0 analysts
Implied Upside
+43.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$195 - $260
Analyst target range
Bulls vs Bears: VRSK Investment Factors
The bear case currently has stronger evidence in terms of price action and near-term fundamentals: VRSK has underperformed the S&P 500 by 48.8 percentage points over the past year, earnings are declining, and the AI disruption narrative remains unresolved. However, the bull case rests on a formidable regulatory moat, sector-leading margins, and a 43.3% upside to analyst targets, suggesting the selloff may be overdone. The single most important tension is whether AI will commoditize Verisk's proprietary data or reinforce its position as an AI-enabled analytics provider; if the latter proves true, the stock is deeply undervalued, but if the former materializes, the current valuation could still be too high. The market is clearly pricing in significant disruption risk, as evidenced by the 33.8% one-year decline and the stock trading near its 52-week low. Resolution of this debate will likely determine whether VRSK is a value trap or a generational buying opportunity.
Bullish
- Analyst targets imply 43% upside: 17 analysts rate VRSK a Buy with an average target of $234.76, implying 43.3% upside from the current $163.88. Even the lowest target of $195.00 represents 19.0% upside, indicating that professional analysts see the selloff as overdone.
- Regulatory moat protects core business: Verisk's origins as the nonprofit Insurance Services Office (ISO) and its role in setting industry-standard loss costs and policy language create a quasi-utility position in the P&C ecosystem. This regulatory and network moat is difficult for AI alone to replicate, as insurers rely on Verisk's standardized data for compliance and underwriting.
- Sector-leading margins and cash flow: Verisk generates a 44.6% operating margin and 29.6% net margin, with $1.24 billion in trailing free cash flow. These metrics are exceptional for a software-services company and provide ample resources to invest in AI capabilities or return capital to shareholders.
- Low beta offers defensive characteristics: With a beta of 0.662, VRSK is significantly less volatile than the broader market. This defensive profile is attractive in uncertain markets and suggests the stock may be less susceptible to macro-driven selloffs, making it a potential safe haven within the technology sector.
Bearish
- Severe relative underperformance vs. market: VRSK has declined 33.8% over the past year while the S&P 500 gained 15.0%, resulting in a relative strength of -48.8%. This massive underperformance reflects deep investor skepticism about the company's future in an AI-driven world.
- AI commoditization threat to data moat: The central bear thesis is that generative AI could erode the value of Verisk's proprietary data and analytics subscriptions by enabling insurers to build similar capabilities in-house or through cheaper AI-powered alternatives. This existential threat has driven the stock down roughly 50% from its 52-week high of $250.20.
- Premium valuation despite growth deceleration: VRSK trades at a trailing P/E of 34.4x and a forward P/E of 18.8x, with a price-to-sales ratio of 10.1x. While the forward P/E appears reasonable, the PEG ratio is negative (-10.07) due to recent earnings declines, and the price-to-book ratio of 100.7x is exceptionally high, leaving little room for error.
- Earnings decline and margin pressure: Q2 2026 EPS fell to $1.75 from $1.81 in Q2 2025, and net income declined to $228.6 million from $253.3 million. The net margin compressed to 28.4% from 32.8% a year earlier, indicating that profitability is under pressure even as revenue grows.
VRSK Technical Analysis
Beta
0.69
0.69x market volatility
Max Drawdown
-42.6%
Largest decline past year
52-Week Range
$156-$249
Price range past year
Annual Return
-34.4%
Cumulative gain past year
| Period | VRSK Return | S&P 500 |
|---|---|---|
| 1m | -12.1% | +0.6% |
| 3m | -15.1% | +3.6% |
| 6m | -6.9% | +14.6% |
| 1y | -34.4% | +15.8% |
| ytd | -26.1% | +13.6% |
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VRSK Fundamental Analysis
Quarterly Revenue
$806300000.0B
2026-06
Revenue YoY Growth
+4.4%
YoY Comparison
Gross Margin
71.0%
Latest Quarter
Free Cash Flow
$1.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is VRSK Overvalued?
PE
34.4x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 26x~50x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
20.1x
Enterprise Value Multiple
Investment Risk Disclosure
Verisk faces significant financial and operational risks. The company's debt-to-equity ratio of 16.3x is high, and interest expense has risen to $52.8 million in Q2 2026 from $35.5 million a year earlier, consuming a growing share of operating income. The current ratio of 1.20 indicates limited short-term liquidity, which could constrain flexibility if AI disruption requires accelerated investment. Additionally, revenue is concentrated in the US (83%) and in a single segment (Insurance), exposing the company to regulatory changes or competitive pressures within the P&C industry. Earnings volatility is evident: Q2 2026 EPS declined to $1.75 from $1.81 year-over-year, and net margin compressed to 28.4% from 32.8%, suggesting that profitability is under pressure even as revenue grows modestly.
Market and competitive risks are substantial. VRSK trades at a trailing P/E of 34.4x and a price-to-sales ratio of 10.1x, which is a premium to many software-services peers, leaving the stock vulnerable to multiple compression if growth slows further. The AI commoditization threat is the most prominent competitive risk, as generative AI could enable insurers to build in-house analytics or use cheaper alternatives, eroding Verisk's moat. The stock's beta of 0.662 indicates lower market correlation, but sector rotation away from technology or a broad market downturn could still pressure the shares. Recent news highlights the intense debate: a Motley Fool article from May 2026 titled "Will Verisk's Valuable Data Moat Hold, or Will AI Commoditize It?" captures the anxiety that has driven the stock down roughly 50% from its high.
The worst-case scenario involves AI rapidly commoditizing Verisk's core data and analytics offerings, leading to customer attrition, pricing pressure, and a sharp earnings decline. In this scenario, the stock could retest its 52-week low of $155.94, representing a 4.8% decline from the current price of $163.88, or fall further to the analyst low target of $195.00 (which is above current levels, but in a severe bear case, targets could be revised downward). A more realistic downside, given the 42.56% max drawdown over the past year, would be a decline to the $140-$150 range, implying a loss of 8-15% from current levels. If the AI threat intensifies and the company misses earnings, the stock could lose 20-30% from current levels, approaching the 52-week low or lower.
FAQ
The most severe risk is AI commoditization, which could erode Verisk's proprietary data moat and lead to customer attrition or pricing pressure, as highlighted by the 33.8% one-year decline. Financial risks include high leverage (debt-to-equity of 16.3x) and rising interest expense ($52.8 million in Q2 2026), which could strain cash flow if earnings decline. Competitive risks involve insurers building in-house analytics or using cheaper AI alternatives, potentially reducing demand for Verisk's subscriptions. Macro risks include sector rotation away from technology and a low beta (0.662) that may not protect against a broad market downturn. Additionally, the company's revenue concentration in the US (83%) and single segment (Insurance) exposes it to regulatory changes and industry-specific downturns.
Our 12-month forecast has a base case (55% probability) of $195-$235, assuming mid-single-digit revenue growth and stable margins, with the stock trading toward the analyst average target of $234.76. The bull case (25% probability) targets $260-$280 if AI fears subside and Verisk successfully integrates AI, driving multiple expansion. The bear case (20% probability) targets $140-$160 if AI disruption accelerates, pushing the stock below its 52-week low of $155.94. The most likely scenario is the base case, hinging on Verisk maintaining its regulatory moat and delivering consistent earnings. Key to watch is whether Q3 2026 earnings show revenue growth above 4% and operating margins above 40%.
VRSK appears undervalued on a forward basis but fairly valued to slightly overvalued on trailing metrics. The forward P/E of 18.8x is below the trailing P/E of 34.4x, suggesting the market expects earnings recovery, and the price-to-sales ratio of 10.1x is high but justified by a 44.6% operating margin. Compared to its own history, the stock is trading at a significant discount to its 52-week high of $250.20, and the 43.3% upside to analyst targets implies the market is pricing in excessive pessimism. However, the negative PEG ratio (-10.07) and high price-to-book ratio (100.7x) indicate that the valuation is not cheap on all measures. Overall, the market is pricing in a high probability of AI disruption, and if that fear proves overblown, the stock is undervalued; if not, it could still be overvalued.
VRSK presents a compelling risk/reward for long-term investors, with 43.3% upside to the analyst average target of $234.76 and a forward P/E of 18.8x that is reasonable for a wide-moat business. However, the stock has fallen 33.8% over the past year due to AI disruption fears, and near-term earnings are under pressure (Q2 2026 EPS declined to $1.75 from $1.81). The biggest downside risk is that AI commoditizes Verisk's data moat, potentially driving the stock below its 52-week low of $155.94. For investors with a 3-5 year horizon who believe the regulatory moat will hold, the current price offers an attractive entry point, but those seeking short-term gains should wait for a technical stabilization above $180.
VRSK is best suited for long-term investment (minimum 3-5 years) given its wide moat, strong cash flow, and the time needed for the AI disruption narrative to resolve. The stock's low beta (0.662) and lack of a high dividend (0.81% yield) make it less attractive for short-term trading or income strategies. Near-term volatility is likely to remain high, as evidenced by the 42.56% max drawdown over the past year and the 12.9% decline in the last month. Long-term investors can accumulate on weakness, focusing on the company's ability to adapt to AI and maintain its regulatory advantage. Short-term traders may find opportunities around earnings, but the risk/reward is less favorable without a clear catalyst.