Verisk Analytics
VRSK
$170.94
-5.27%
Verisk Analytics is a leading data, analytics, and technology provider primarily serving the property-casualty insurance industry, offering critical solutions for underwriting, claims, and catastrophe modeling. The company is a dominant market leader and essential partner to insurers, leveraging its deep industry roots and proprietary datasets to create high-switching-cost, recurring revenue streams. The current investor narrative is dominated by a significant stock price decline, raising questions about the company's growth trajectory and margin profile following its latest quarterly results, which showed a deceleration in profitability despite modest revenue growth.…
VRSK
Verisk Analytics
$170.94
VRSK 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Verisk Analytics's 12-month outlook, with a consensus price target around $222.22 and implied upside of +30.0% versus the current price.
Average Target
$222.22
4 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
4
covering this stock
Price Range
$137 - $222
Analyst target range
Analyst coverage is limited, with only 7 analysts providing estimates, indicating this is a focused institutional story rather than a widely covered mega-cap. The consensus leans bullish, with recent institutional ratings from firms like Raymond James ('Strong Buy'), Wells Fargo ('Overweight'), and JP Morgan ('Overweight') outweighing neutral stances from Goldman Sachs and Morgan Stanley. The average revenue estimate for the next period is $4.21 billion, with a tight range between $4.14 billion and $4.26 billion, suggesting strong conviction in the company's near-term revenue visibility, though the lack of explicit price targets in the data limits the calculation of implied upside or downside from the current price. The pattern of recent ratings shows stability, with most firms reaffirming their positions following the Q4 2025 earnings report in February 2026, indicating analysts are taking a 'wait-and-see' approach rather than making dramatic changes to their thesis.
Bulls vs Bears: VRSK Investment Factors
The bear case currently holds stronger evidence, anchored by the severe and unexpected deterioration in profitability in Q4 2025, which directly challenges the high-margin, premium-valuation narrative. While the bull case points to a deeply oversold stock with a resilient business model and strong cash flow, the margin collapse is a fundamental red flag that overshadows these positives. The single most important tension in the investment debate is whether the Q4 margin compression is a one-time anomaly related to cost or mix issues, or the beginning of a sustained downtrend in the company's pricing power and operational efficiency. The resolution of this question will determine if the current price represents a value trap or a compelling entry point.
Bullish
- Strong Free Cash Flow Generation: The company generated $1.19 billion in trailing twelve-month free cash flow, demonstrating its ability to convert earnings into cash despite margin pressures. This robust cash generation provides ample liquidity to service its high debt load (D/E of 16.3) and fund operations internally.
- Essential, High-Switching-Cost Business Model: As a leading data and analytics provider to the P&C insurance industry, Verisk benefits from deep customer integration and recurring revenue streams. This market leadership and essential role create significant barriers to entry and customer retention, supporting long-term stability.
- Valuation Compression from Peak: The stock's trailing P/E of 34.2x is well below its Q1 2025 high of 44.9x, indicating significant multiple compression. The forward P/E of 21.0x suggests the market is pricing in an earnings recovery, offering a potential entry point if fundamentals stabilize.
- Analyst Conviction in Revenue Visibility: Analyst revenue estimates for the next period show a tight range ($4.14B to $4.26B) around an average of $4.21B. This narrow band indicates strong conviction in the company's near-term revenue visibility and the resilience of its core business model.
Bearish
- Severe Profitability Deterioration: Q4 2025 gross margin collapsed to 59.6% from 70.1% in Q3 2025, while net margin fell to 25.3% from 29.4%. This dramatic sequential compression, on only 5.9% YoY revenue growth, signals significant cost inflation or an unfavorable revenue mix shift that threatens the core investment thesis.
- Revenue Growth Deceleration: Q4 2025 revenue grew 5.9% YoY, a deceleration from higher rates in prior 2025 quarters. This slowdown in the core insurance analytics business raises concerns about the company's ability to re-accelerate growth and justify its premium valuation multiples.
- Elevated Valuation Despite Weakness: Even after the steep decline, Verisk trades at a forward P/E of 21.0x and EV/Sales of 9.1x, which are premiums to the Consulting Services industry. If margin recovery disappoints, these multiples are vulnerable to further compression, limiting upside.
- High Financial Leverage: A debt-to-equity ratio of 16.3 indicates a highly leveraged balance sheet. While strong FCF provides coverage, this leverage amplifies risks if operating performance weakens further, potentially restricting financial flexibility for investments or M&A.
VRSK Technical Analysis
The stock is in a pronounced and sustained downtrend, having declined 38.5% over the past year. With a current price of $181.11, it is trading near the lower end of its 52-week range ($161.70 to $322.92), positioning it at approximately 44% of that range, which suggests the stock is deeply oversold and may represent a value opportunity, though it also signals significant negative momentum and potential fundamental concerns. Recent momentum remains negative and aligns with the longer-term downtrend, with the stock down 16.7% over the last three months and 1.3% over the past month; this persistent weakness, highlighted by a relative strength of -20.9 against the S&P 500 over three months, indicates no meaningful signs of a reversal and continued underperformance. Key technical support is clearly defined at the 52-week low of $161.70, while resistance sits at the 52-week high of $322.92; a breakdown below support could trigger another leg down, whereas a sustained move above recent highs near $225 would be needed to signal a potential trend change. The stock's beta of 0.819 indicates it is about 18% less volatile than the broader market, which is notable given its steep decline, suggesting the sell-off has been driven by company-specific rather than systemic factors.
Beta
0.73
0.73x market volatility
Max Drawdown
-48.9%
Largest decline past year
52-Week Range
$162-$323
Price range past year
Annual Return
-42.3%
Cumulative gain past year
| Period | VRSK Return | S&P 500 |
|---|---|---|
| 1m | -7.5% | +11.4% |
| 3m | -7.4% | +8.3% |
| 6m | -20.4% | +9.4% |
| 1y | -42.3% | +31.3% |
| ytd | -22.7% | +7.6% |
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VRSK Fundamental Analysis
Revenue growth has been modest but is showing signs of deceleration; Q4 2025 revenue was $778.8 million, representing a 5.9% year-over-year increase, but this marks a slowdown from the higher growth rates seen in prior quarters of 2025, indicating potential pressure on the core insurance analytics business. Profitability metrics have weakened considerably, with Q4 2025 net income at $197.2 million (a 25.3% net margin) and gross margin at 59.6%, which represents a significant compression from the Q3 2025 gross margin of 70.1% and net margin of 29.4%, signaling potential cost inflation or unfavorable revenue mix. The balance sheet is leveraged but cash-generative, with a high debt-to-equity ratio of 16.3; however, the company generated robust free cash flow of $1.19 billion over the trailing twelve months and maintains a current ratio of 1.2, indicating it has the liquidity to service its obligations and fund operations internally despite the elevated debt load.
Quarterly Revenue
$778800000.0B
2025-12
Revenue YoY Growth
+0.05%
YoY Comparison
Gross Margin
+0.59%
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?
Given the company's positive net income, the primary valuation metric is the Price-to-Earnings (PE) ratio. The trailing PE is 34.2x, while the forward PE is significantly lower at 21.0x, indicating the market expects a substantial recovery in earnings over the next twelve months. Compared to sector averages, Verisk trades at a premium; its forward PE of 21.0x and EV/Sales of 9.1x are elevated for the Consulting Services industry, suggesting the market still prices in its high-quality, recurring revenue model and market leadership despite recent operational setbacks. Historically, the current trailing PE of 34.2x is below the stock's own extreme historical highs seen in early 2025 (e.g., 44.9x in Q1 2025) but remains above levels seen during more stable periods, indicating valuation has compressed but may not yet fully reflect the recent margin deterioration, leaving room for further multiple contraction if fundamentals do not improve.
PE
34.2x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 17x~130x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
20.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks are pronounced, centered on the alarming margin compression. The Q4 gross margin drop of over 1,050 basis points sequentially (70.1% to 59.6%) is a severe operational warning sign. Coupled with a high debt-to-equity ratio of 16.3, the company's financial risk is elevated; while $1.19B in TTM FCF provides a cushion, sustained margin pressure could quickly erode cash generation needed to service this debt. Revenue growth deceleration to 5.9% YoY further compounds the risk, suggesting the core business may be facing saturation or competitive pressures.
Market & Competitive Risks are significant given the stock's premium valuation. Trading at a forward P/E of 21.0x and EV/Sales of 9.1x, Verisk remains priced for growth and high margins relative to its sector. The recent 38.5% price decline, with a beta of only 0.819, confirms this is a company-specific derating. The primary risk is further multiple compression if the company fails to demonstrate a credible path to margin recovery, as the market may reassess the sustainability of its premium. Competitive disruption from insurtech or data analytics alternatives, though not imminent, poses a long-term threat to its entrenched position.
Worst-Case Scenario involves a failure to arrest the margin decline, leading to consecutive quarters of earnings misses. This could trigger a loss of analyst confidence (currently leaning bullish) and a re-rating towards a market-average multiple. A realistic downside could see the stock retest and break its 52-week low of $161.70, representing a potential loss of approximately -11% from the current price of $181.11. In a more severe scenario where growth stalls and margins normalize lower, the stock could approach levels implied by a significant discount to historical averages, potentially implying a downside of -20% to -30%.