Verisk Analytics stock target increased, rating held on growth

On Tuesday, BMO Capital Markets updated its outlook on shares of Verisk Analytics (NASDAQ:VRSK), increasing the price target to $280 from the previous $276 while maintaining a Market Perform rating on the shares. The adjustment comes as Verisk Analytics continues to exhibit financial resilience, with the firm expecting another robust quarter ahead.

According to InvestingPro data, Verisk maintains impressive gross profit margins of 68.24% and has achieved 7.16% revenue growth over the last twelve months, though current analysis suggests the stock may be trading above its Fair Value.

The anticipation of a strong performance is partly due to accelerated revenue growth in the company's Claims segment, which has seen a positive impact from recent weather events such as Hurricanes Helene and Milton. These natural disasters have driven demand for Verisk's services, and the trend is expected to extend into the first half of 2025, following the California wildfires.

With a market capitalization of $39.42 billion, Verisk demonstrates strong market presence and stability, reflected in its GOOD Financial Health score on InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ top US stocks.

BMO Capital's analyst noted that Verisk management has a conservative approach to guidance, which began in 2023. Despite outperforming expectations each quarter, the company has not adjusted its 2024 guidance. This conservative stance on forecasting is maintained even in the face of solid quarterly beats, as the company does not provide quarterly guidance.

The analyst's comments highlight Verisk's prudent management style and suggest that the company's financial health could be more robust than guidance figures imply. The raised price target reflects confidence in the company's continued strong performance, particularly within its Claims segment, which is benefiting from recent increases in weather-related activities.

Investors will be watching Verisk Analytics closely as the company navigates the impacts of natural disasters on its business while maintaining a steady financial course. The updated price target from BMO Capital Markets signals a positive outlook for the company's stock performance in the near term. The company's next earnings report is scheduled for February 25, 2025, with analysts maintaining positive expectations for profitability.

In other recent news, Verisk Analytics demonstrated robust financial performance in the third quarter of 2024, posting a 7% increase in consolidated revenue to $725 million. This growth was primarily driven by a 9.1% rise in subscription revenues, contributing to a jump in income from continuing operations to $220 million and a 19.4% increase in diluted GAAP earnings per share to $1.54.

These recent developments follow Barclays (LON:BARC)' decision to downgrade Verisk's stock rating to Equalweight, maintaining the price target at $310, reflecting a cautious outlook for the data analytics and risk assessment firm.

Despite the downgrade, the firm's fundamentals remain intact, as evidenced by its third-quarter financial performance. RBC Capital Markets has maintained positive ratings on Verisk, projecting a 6-8% revenue increase and a double-digit rise in earnings per share.

Looking ahead, Verisk anticipates strong subscription growth in 2025, driven by factors such as forms, rules, loss costs, anti-fraud analytics, and pricing tailwinds. Despite potential challenges in 2025, Verisk remains optimistic due to its subscription momentum and premium growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.