Last Update 30 Oct 25
Fair value Decreased 3.10%The analyst price target for Verisk Analytics has been lowered by approximately $9 to $290.53. Analysts are weighing mixed opinions on growth prospects, margin trends, and valuation following recent research updates.
Analyst Commentary
Analyst perspectives on Verisk Analytics remain divided following recent updates, with both optimistic and cautious interpretations of the company’s performance and outlook. The following summarizes the key points from recent Street research.
Bullish Takeaways- Bullish analysts point to the company's strong structural position and recurring revenue growth, which are seen as fundamental advantages supporting long-term value.
- Expectations for the company’s margins remain high. Potential industry-leading performance is viewed as warranting a premium valuation compared to peers.
- Recent upgrades suggest that current headwinds are considered temporary and manageable. A 6% to 8% growth range is identified as achievable over the longer term.
- Upcoming corporate events, such as February’s guidance and the March investor relations day, are anticipated as possible catalysts for renewed momentum in the stock.
- Bearish analysts express concerns that downside risks are not fully priced into the current share value, particularly following recent acquisitions.
- The acquisition of AccuLynx is viewed as dilutive to invested capital and is expected to require higher leverage. This could potentially impact execution and returns in the near term.
- Heavy investment in areas like artificial intelligence, while strategically important, signals increasing competition in a market seen as vulnerable to disruption.
- The company’s valuation is considered "too rich" by some, especially in the context of slowing organic sales growth and execution uncertainty.
What's in the News
- Verisk has expressed interest in acquiring CyberCube Analytics, a cyber-risk analytics firm. The move aims to strengthen Verisk's cybersecurity and risk management capabilities (Insurance Insider).
- The company updated its 2025 earnings guidance and is now forecasting total revenue of $3.05 billion to $3.08 billion, down from the earlier range of $3.09 billion to $3.13 billion.
- Verisk completed a significant buyback tranche by repurchasing 370,103 shares for $100 million. This brings the total to 3,266,344 shares bought back for $951.35 million since February 2024.
- Recent product launches include the Commercial Rebuild solution for the U.K. market, which enhances commercial property insurance assessments, and a new standardized pet insurance line in the U.S.
- Collaborations announced with Jopari Solutions and ServiceTitan are designed to accelerate the adoption of AI-driven and connected workflow solutions for the insurance industry.
Valuation Changes
- Consensus Analyst Price Target has been lowered from $299.82 to $290.53, reflecting a reduction of just over $9.
- Discount Rate has edged down slightly from 7.16% to 7.16%, indicating minimal change in perceived investment risk.
- Revenue Growth projections have risen modestly, from 9.05% to 9.17%.
- Net Profit Margin estimates have declined slightly, moving from 31.74% to 31.42%.
- Future P/E has decreased from 40.52x to 39.52x, indicating a marginally lower expected earnings multiple.
Key Takeaways
- Verisk's strategic expansion in go-to-market approaches and cutting-edge platforms aims to boost revenue growth and strengthen market position among insurers.
- Disciplined cost management and investments in data precision enhance margins and profit, supporting strong shareholder value and competitive positioning.
- Economic uncertainties and industry challenges could hinder Verisk's revenue growth and margins across insurance, financial services, and marketing sectors.
Catalysts
About Verisk Analytics- Engages in the provision of data analytics and technology solutions to the insurance industry in the United States and internationally.
- Verisk Analytics is focusing on expanding its go-to-market strategy to drive revenue growth by applying successful sales models to more business units in 2025, which could lead to increased sales and customer acquisition. This focus will likely enhance revenue.
- The company is responding to customer demand for better insights and data connections, supporting revenue growth by leveraging its Core Lines Reimagine project, which provides timely loss insights and improved data analytics. These enhancements are likely to contribute to higher revenue and client retention.
- Verisk is developing new platforms like the Enterprise Exposure Manager and Verisk Synergy Studio, which are expected to provide scalable and efficient risk assessment solutions, potentially driving revenue growth and expanding market share among insurers and risk managers.
- Investments in data precision and real-time insights, particularly in response to a volatile economic and risk environment, are expected to maintain competitive pricing capabilities for clients. This strategic focus could strengthen Verisk's revenue and enhance margins due to premium analytics services.
- The company is committed to maintaining disciplined cost management, resulting in margin expansion and profit growth. The focus on efficiency could lead to improved net margins and increased earnings, supporting shareholder value through higher EBITDA margins.
Verisk Analytics Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Verisk Analytics's revenue will grow by 9.1% annually over the next 3 years.
- Analysts assume that profit margins will increase from 30.4% today to 31.5% in 3 years time.
- Analysts expect earnings to reach $1.2 billion (and earnings per share of $9.06) by about September 2028, up from $909.3 million today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 41.8x on those 2028 earnings, up from 41.3x today. This future PE is greater than the current PE for the US Professional Services industry at 26.3x.
- Analysts expect the number of shares outstanding to decline by 1.06% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 7.15%, as per the Simply Wall St company report.
Verisk Analytics Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- The insurance industry still faces an uncertain risk environment due to inflation, regulatory changes, and rising reconstruction costs, which could negatively impact Verisk's future revenue growth as insurers become more conservative or cautious with spending.
- Severe weather events and catastrophic losses can create volatility and unpredictability in the insurance market, potentially affecting Verisk’s transaction-based revenues and, consequently, its net margins.
- The potential impact of tariffs and macroeconomic pressures might lead to higher costs and lower profitability for the insurance industry, which could, in turn, reduce Verisk's client spending on its data and analytics services, thereby impacting revenue growth.
- Verisk's marketing business is experiencing headwinds in economically sensitive areas outside the insurance sector, such as financial services and mortgages, leading to potential revenue declines in this segment.
- Increased interest expense due to higher debt balances and rising interest rates may pressure Verisk’s net margins and earnings growth if economic conditions do not improve, leading to increased financial costs.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $307.312 for Verisk Analytics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $340.0, and the most bearish reporting a price target of just $258.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.9 billion, earnings will come to $1.2 billion, and it would be trading on a PE ratio of 41.8x, assuming you use a discount rate of 7.2%.
- Given the current share price of $268.66, the analyst price target of $307.31 is 12.6% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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