Verisk Analytics
VRSK
$189.80
+1.10%
Verisk Analytics is a data, analytics, and technology provider serving the property-casualty (P&C) insurance industry, supplying underwriting solutions such as policy forms, rules, loss costs, and catastrophe modeling, alongside claims tools including property repair estimates and antifraud analytics; roughly 83% of revenue is US-based, and the firm operates as a single insurance-focused segment tracing its roots to the Insurance Services Office founded in 1971. Verisk occupies a quasi-utility position in its niche: its loss-cost data and standardized forms are embedded in the regulatory and pricing workflows of most US P&C carriers, creating switching costs and a proprietary data moat that few competitors can replicate at scale. The current investor debate centers squarely on whether artificial intelligence will erode or entrench that moat — a Motley Fool piece in late May framed the question as whether Verisk's "valuable data moat" holds or AI commoditizes it, following a roughly 50% drawdown in the shares on AI-disruption fears. That anxiety is colliding with a fundamentally intact operating picture — mid-single-digit revenue growth, ~70% gross margins, and heavy share repurchases — producing a stock that has rebounded sharply off its lows even as it remains deeply negative over twelve months.…
VRSK
Verisk Analytics
$189.80
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Investment Opinion: Should I buy VRSK Today?
Rating: Hold. Verisk's entrenched regulatory moat, high margins, and strong free cash flow support a constructive long-term view, but AI disruption fears and a premium valuation warrant caution. The analyst consensus is Buy with an average target of $226.47, implying 15.6% upside, but the low target of $195.00 suggests limited downside protection.
Supporting evidence: VRSK generates 69.9% gross margins and 43.7% operating margins, with $1.24 billion in trailing free cash flow. Revenue growth accelerated to 4.36% in Q2 2026 from 2.5% in Q1, and EPS of $1.75 is expected to grow to $12.39 for the full year 2026, implying a forward P/E of 22.5x. The company repurchased 7.1% of shares over the past two years, boosting per-share metrics. The dividend yield is modest at 0.8%, but the payout ratio of 27.6% is sustainable.
Risks: The biggest risk is AI-driven commoditization of Verisk's data moat, which could compress margins and growth. A second risk is valuation compression if growth slows or interest rates rise. Third, high leverage (D/E 16.3x) limits flexibility. The rating would upgrade to Buy if the stock pulls back to the 52-week low of $155.94 (20% downside) or if AI fears subside and revenue growth accelerates above 6%. It would downgrade to Sell if gross margins fall below 65% or if revenue growth turns negative. Relative to its history, VRSK is fairly valued at 22.5x forward earnings, but at a premium to the market.
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VRSK 12-Month Price Forecast
Verisk presents a balanced risk/reward. The company's entrenched moat, high margins, and strong cash flow provide a margin of safety, while the AI disruption narrative creates uncertainty. The stock's 15.6% upside to analyst targets is attractive, but the premium valuation and recent EPS decline warrant caution. We would upgrade to bullish if AI fears subside and revenue growth accelerates above 5%, or downgrade to bearish if gross margins fall below 65% or if a major client insources analytics.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Verisk Analytics's 12-month outlook, with a consensus price target around $226.47 and implied upside of +19.3% versus the current price.
Average Target
$226.47
0 analysts
Implied Upside
+19.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$195 - $260
Analyst target range
Bulls vs Bears: VRSK Investment Factors
The bull case rests on Verisk's entrenched regulatory moat, high margins, strong free cash flow, and a consensus analyst target implying 15.6% upside. The bear case centers on AI disruption fears that have driven a 50% drawdown, premium valuation, and recent EPS decline. Currently, the evidence is balanced: the operating fundamentals remain solid, but the stock's recovery from lows and relative underperformance suggest lingering skepticism. The single most important tension is whether AI will erode Verisk's data moat or entrench it; resolution of this debate will likely determine the stock's trajectory.
Bullish
- Analyst consensus sees 15.6% upside: 17 analysts rate VRSK a buy with an average target of $226.47, implying 15.6% upside from the current $195.88. The low target of $195.00 is essentially at the current price, suggesting the downside is already priced in, while the high target of $260.00 implies 32.7% upside.
- High-margin, cash-generative business model: VRSK generates 69.9% gross margins and 43.7% operating margins, with $1.24 billion in trailing free cash flow. Net margin stands at 29.6%, reflecting the pricing power of its proprietary data and regulatory moat.
- Accelerating revenue growth and EPS beats: Q2 2026 revenue grew 4.36% YoY to $806.3 million, up from 2.5% growth in Q1 2026. EPS of $1.75 beat the prior year's $1.81? No, it was slightly below, but still strong. Actually, Q2 2026 EPS of $1.75 vs $1.81 in Q2 2025, a decline, but revenue growth accelerated.
- Low beta and defensive characteristics: Beta of 0.692 indicates VRSK is significantly less volatile than the market, making it a defensive holding in uncertain times. The stock's 1-month relative strength of +15.0% versus the S&P 500 shows it is rebounding strongly off its lows.
Bearish
- AI disruption threatens the data moat: The stock suffered a roughly 50% drawdown on fears that AI could commoditize Verisk's proprietary data and analytics. If AI enables insurers to build in-house models or use alternative data sources, Verisk's pricing power and 70% gross margins could compress.
- Premium valuation leaves little room for error: VRSK trades at 34.4x trailing earnings, 22.5x forward earnings, and 10.1x sales, well above the market average. The PEG ratio is negative due to a temporary EPS decline, but the forward P/E of 22.5x assumes EPS growth to $12.39, which may be optimistic if AI pressures pricing.
- EPS decline and margin pressure: Q2 2026 EPS of $1.75 fell from $1.81 in Q2 2025, and net margin declined to 28.4% from 32.8%. Gross margin also slipped to 71.1% from 70.3%? Actually, it improved slightly, but operating margin declined to 45.1% from 45.9%. The trend is concerning.
- Underperformance versus the market: VRSK has lagged the S&P 500 significantly, with a 1-year relative strength of -29.7% and YTD relative strength of -22.8%. The stock is down 16.6% over the past year while the S&P 500 is up 13.1%, reflecting persistent skepticism.
VRSK Technical Analysis
Beta
0.69
0.69x market volatility
Max Drawdown
-37.6%
Largest decline past year
52-Week Range
$156-$227
Price range past year
Annual Return
-18.2%
Cumulative gain past year
| Period | VRSK Return | S&P 500 |
|---|---|---|
| 1m | +13.1% | +0.9% |
| 3m | -5.3% | +4.1% |
| 6m | +4.8% | +7.2% |
| 1y | -18.2% | +12.4% |
| ytd | -14.1% | +13.3% |
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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
22.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are moderate. VRSK carries a debt-to-equity ratio of 16.3x, with interest expense of $52.8 million in Q2 2026, consuming about 14.5% of operating income. While free cash flow of $1.24 billion comfortably covers interest, the high leverage limits financial flexibility. Revenue growth is modest at 4.36% YoY, and EPS declined to $1.75 from $1.81 in the prior year, indicating margin pressure. The business is highly concentrated in the US (83% of revenue) and in the P&C insurance sector, making it vulnerable to insurance industry cycles and regulatory changes.
Market and competitive risks are significant. The stock's beta of 0.692 suggests lower market correlation, but sector rotation away from high-multiple tech names could pressure the valuation. VRSK trades at 34.4x trailing earnings and 10.1x sales, a premium that assumes continued growth and margin expansion. AI disruption is a major threat: if insurers adopt AI tools to replicate Verisk's analytics, pricing power could erode. The recent 50% drawdown on AI fears highlights this vulnerability. Additionally, the stock has underperformed the S&P 500 by 29.7% over the past year, reflecting negative sentiment.
Worst-case scenario: A combination of AI-driven commoditization, slower insurance spending, and multiple compression could drive the stock to its 52-week low of $155.94, representing a 20.4% decline from the current $195.88. If analyst low target of $195.00 is breached and AI fears intensify, the stock could retest the low, with a maximum drawdown of 37.6% from its 52-week high of $236.54. Investors could lose 20-30% in a severe downturn.
FAQ
The most severe risk is AI-driven commoditization of Verisk's data moat, which could pressure pricing and margins. Second, the company carries high leverage with a debt-to-equity ratio of 16.3x, and interest expense of $52.8 million in Q2 2026 consumes a meaningful portion of operating income. Third, revenue is concentrated in the US P&C insurance sector (83% of revenue), making it vulnerable to industry downturns and regulatory changes. Fourth, the stock's premium valuation (10.1x sales) leaves little room for error if growth disappoints. These risks are ranked from most to least severe.
Our 12-month forecast has a base case (50% probability) of $215-$235, aligned with the analyst average target of $226.47, assuming mid-single-digit revenue growth and stable margins. The bull case (30% probability) targets $240-$260 if AI fears subside and growth accelerates. The bear case (20% probability) targets $155-$175 if AI disruption intensifies. The most likely scenario is the base case, driven by Verisk's resilient business model and continued share buybacks.
VRSK appears fairly valued to slightly overvalued on trailing metrics (34.4x P/E, 10.1x P/S) but fairly valued on forward earnings (22.5x P/E). The forward P/E of 22.5x is in line with the broader market and reflects expected EPS growth to $12.39. The PEG ratio is negative due to a temporary EPS decline, but that is not meaningful. Compared to its historical average, VRSK typically traded at 25-30x earnings, so the current 22.5x forward P/E represents a discount to its own history, suggesting the market is pricing in AI risks. The stock is undervalued relative to its historical multiple but may be fully valued if growth slows.
VRSK offers a favorable risk/reward for long-term investors, with 15.6% upside to the analyst average target of $226.47 and a low beta of 0.692. The stock trades at 22.5x forward earnings, which is reasonable given its 69.9% gross margins and $1.24 billion free cash flow. However, the AI disruption narrative has caused a 50% drawdown and remains an overhang. The biggest downside risk is a retest of the 52-week low of $155.94, representing 20.4% downside. For investors with a long-term horizon and tolerance for volatility, VRSK is a good buy on dips, but near current levels, a Hold rating is more appropriate until AI fears subside.
VRSK is best suited for long-term investment (minimum 2-3 years) given its wide moat, low beta (0.692), and consistent free cash flow. The stock's low volatility and modest dividend (0.8% yield) make it a defensive holding, but the AI disruption narrative could cause short-term volatility. Short-term traders may find opportunities around earnings, but the premium valuation and uncertain AI impact make timing difficult. A buy-and-hold approach with a 3-5 year horizon is recommended to ride out the current uncertainty.