Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Thursday, RBC Capital Markets sustained their optimistic stance on Verisk Analytics (NASDAQ:VRSK) shares, maintaining an Outperform rating and a $300.00 price target. With the stock trading near its 52-week high of $300.50 and sporting a market capitalization of $41 billion, InvestingPro analysis suggests the company is currently trading above its Fair Value. The firm’s assessment acknowledges the company’s accelerated subscription growth, which reached 11% year-over-year. This growth is attributed to effective pricing strategies, new customer acquisitions, and the transformation of transactional revenues.
Verisk’s strategic enhancements in marketing and product innovation have led to stronger client engagement at the executive level, resulting in record sales and improved customer retention. These improvements have also contributed to better price realization for the company’s services, reflected in the company’s impressive 68.73% gross profit margin and 7.47% revenue growth over the last twelve months.
Despite these positive developments, there are concerns about the future. The potential uncertainty of pricing increases and the sustainability of the strong subscription growth are creating some hesitancy among investors, reflected in the stock’s recent performance.
Financial projections for fiscal year 2025 indicate that operating revenue growth aligns with expectations set during the 2023 Investor Day. Moreover, the company’s EBITDA margin expansion exceeded previous forecasts for FY25. However, increased depreciation & amortization and interest expenses are anticipated to affect earnings per share growth in 2025.
RBC Capital’s analysis comes as Verisk Analytics continues to navigate the challenges and opportunities within its market, with strategic initiatives aimed at maintaining its growth trajectory and market position. InvestingPro subscribers can access 12+ additional exclusive insights about Verisk, including detailed financial health scores and comprehensive valuation metrics in the Pro Research Report, helping investors make more informed decisions about this data analytics leader.
In other recent news, Verisk Analytics reported its fourth-quarter 2024 earnings, revealing revenue of $736 million, which surpassed forecasts of $733.53 million, while adjusted earnings per share (EPS) slightly missed expectations, coming in at $1.61 compared to the anticipated $1.60. The company experienced an 8.6% year-over-year revenue growth, driven by an 11% increase in subscription revenues. Despite these positive results, Verisk’s guidance for 2025 was slightly below some analysts’ expectations, projecting consolidated revenue between $3,030 million and $3,080 million and an adjusted EPS range of $6.80 to $7.10.
BMO Capital Markets raised its price target for Verisk to $297, maintaining a Market Perform rating, while Morgan Stanley (NYSE:MS) increased its target to $305, keeping an Equalweight rating. Both firms noted Verisk’s strong subscription growth and performance in the Claims and Underwriting segments. Additionally, Verisk’s management announced a new accelerated share repurchase program and an increase in dividends, reflecting the company’s commitment to shareholder returns. Analysts at BMO Capital noted that Verisk’s initial guidance has historically been conservative, suggesting potential for upward revisions in the future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.