Verisk Analytics, Inc.

Based on the provided analysis, here is a comprehensive breakdown of Verisk (VRSK).

Technical Analysis VRSK is in a clear downtrend with deep double-digit losses over recent months, underperforming the broader market significantly. While the current price is not at an extreme low, the substantial maximum drawdown indicates persistent selling pressure. Momentum remains negative, and the chart shows no definitive signs of a reversal.

Fundamental Analysis The company's core operations are strong, with stable revenue growth and impressive profitability metrics like a high return on equity. However, this is overshadowed by a highly leveraged balance sheet, with a debt-to-capitalization over 94%, which poses a significant financial risk. The low cash flow relative to its debt burden is a notable concern.

Valuation & Risk VRSK trades at a premium valuation with high P/E and P/B ratios that are not supported by near-term earnings growth. The primary risks are its substantial leverage and potential for further downside, as evidenced by the large historical drawdown, despite its lower market volatility.

Recommendation VRSK is currently not a compelling buy. The stock's negative technical momentum, coupled with a risky, highly leveraged balance sheet, outweighs its strong operational profitability. While the company is a leader in its niche, the premium valuation is difficult to justify without clear earnings growth catalysts. Investors should wait for signs of improved financial health or a more attractive entry point.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, the 12-month outlook for Verisk (VRSK) is neutral to cautious.

Key Catalysts: A sustained reversal would likely require the company to proactively de-leverage its balance sheet, demonstrating improved financial health that could restore investor confidence. Its strong, profitable core operations in a resilient niche market provide a solid foundation for recovery if macro conditions or company-specific sentiment improve.

Potential Risks: The primary risk remains its highly leveraged financial position (94% debt-to-capital), which is a significant vulnerability in a higher-interest-rate environment and could limit strategic flexibility. Continued negative technical momentum and a premium valuation unsupported by near-term earnings growth pose risks of further downside.

Target Price Range: Given the conflicting signals of strong operations versus high financial risk, a specific target is challenging. A break above the downtrend resistance with improving fundamentals could see a move toward the $200-$220 range, while failure to address leverage concerns could see the stock test lower support levels, making the risk/reward unattractive at the current price.

Wall Street Consensus

Most Wall Street analysts are optimistic about Verisk Analytics, Inc.'s 12-month outlook, with consensus target around $183.89, indicating expected upside potential.

Overall, VRSK has investment potential but also faces challenges. Here are key factors to weigh before investing.

VRSK has experienced substantial underperformance over the recent periods, reflecting significant negative momentum. The stock has posted deep double-digit declines over both one and three-month horizons, decisively underperforming the broader market. This trajectory highlights a pronounced period of weakness for the equity.

The stock's short-term performance is notably weak, with declines exceeding 15% over both one and three months. Furthermore, its relative strength showing a -17.37% figure confirms it has significantly underperformed the market benchmark during this period, indicating substantial selling pressure.

VRSK's current price sits approximately midway between its 52-week low and high, suggesting it is neither severely oversold nor overbought on this metric. However, considering the magnitude of the recent declines and the substantial maximum drawdown of -47.26%, the stock remains in a pronounced downtrend from its yearly peak, implying ongoing bearish sentiment.

Revenue & Profitability Revenue grew sequentially from $768.3M to $778.8M in Q4 2025, but profitability metrics showed mixed signals. The net income margin compressed from 29.4% to 25.3% quarter-over-quarter, primarily due to a significant negative swing in other expenses, which impacted pre-tax margins. Despite this, the operating income ratio remained stable at approximately 45%, indicating core operational profitability was resilient.

Financial Health The company's financial health presents concerns, with a high debt-to-equity ratio of 16.3 and a total debt-to-capitalization of 94.2%, indicating a highly leveraged capital structure. The interest coverage ratio of 6.1 is adequate but not strong, while a current ratio below 1 suggests potential liquidity pressure. Furthermore, the cash flow to debt ratio is low at 0.068, indicating limited cash generation relative to its debt burden.

Operational Efficiency Verisk demonstrates exceptional operational efficiency with a remarkably high return on equity of 63.8%, although this is amplified by its substantial financial leverage. The asset turnover ratio is modest at 0.13, but the high fixed asset turnover of 2.75 suggests effective utilization of long-term assets. The company's ability to convert a significant portion of EBITDA into free cash flow supports its operational effectiveness.

Valuation Level Verisk's current TTM PE ratio of 36.9 indicates a premium valuation that is further amplified by a higher forward PE of 39.4. This negative earnings growth premium is strongly confirmed by the significantly negative PEG ratio of -3.2, which signals that the market is pricing the stock based on factors other than near-term earnings growth prospects. The elevated Price-to-Book ratio of 82.8 underscores that its value is largely derived from intangible assets rather than its accounting book value.

Peer Comparison Due to the unavailability of specific industry average data for comparison, a definitive peer-based valuation assessment cannot be rendered. However, the combination of high multiples across PE, PB, and EV/EBITDA ratios strongly suggests that Verisk trades at a substantial premium relative to typical market valuations. This positioning likely reflects its niche market leadership, high margins, and predictable revenue streams, which investors are willing to pay a premium for despite the lack of earnings growth.

Volatility Risk: VRSK possesses moderate volatility risk, as evidenced by its Beta of 0.79, which suggests the stock is approximately 20% less volatile than the broader market. However, this is tempered by a significant one-year maximum drawdown of -47.26%, indicating potential for substantial downside moves during market stress periods.

Other Risks: The absence of reported short interest implies low immediate pressure from bearish speculation but does not eliminate fundamental risks. Investors should also consider liquidity risks, including trading volumes and bid-ask spreads, particularly given its defensive sector profile.