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On Thursday, BMO Capital Markets adjusted their outlook on Verisk Analytics (NASDAQ:VRSK), increasing the price target to $297 from $280, while keeping a Market Perform rating on the stock. The data analytics company, currently valued at $40.67 billion, is trading near its 52-week high of $300.50. According to InvestingPro analysis, the stock appears to be trading above its Fair Value. Jeffrey Silber, an analyst at BMO Capital, provided insights into the company’s fourth-quarter performance and future expectations.
Verisk Analytics reported a slight beat on adjusted earnings per share for the fourth quarter, maintaining its impressive gross profit margin of 68.73%. The company experienced steady growth in its Underwriting segment, primarily driven by Forms, Rules, and Loss Costs, which relate to pricing strategies. The Claims segment saw a significant acceleration in growth, bolstered by Property Estimating services due to storm-related activities and a robust Anti-Fraud segment, contributing to the company’s overall revenue growth of 7.47% over the last twelve months.
Despite these positive results, Verisk’s guidance for 2025 came in lighter than anticipated, which led to a minor decline in share prices. While the stock trades at a relatively high P/E ratio of 45.23x, Silber noted that the company’s initial guidance has historically been conservative over the past two years, suggesting the potential for future upward revisions. InvestingPro data reveals 12+ additional key insights about Verisk’s valuation and growth prospects.
Management’s commentary added some positive news for investors, highlighting robust share buyback activity in January, an increase in dividends, and the authorization of a new accelerated share repurchase (ASR) program. These actions demonstrate Verisk’s commitment to returning value to shareholders.
In light of the recent developments and future prospects, BMO Capital has slightly reduced its earnings estimates for Verisk. Nonetheless, the firm decided to raise the target price, basing it on the company’s estimated 2026 earnings. The new price target reflects a modest increase, indicating a continued expectation of growth for Verisk Analytics, albeit at a cautious pace as indicated by the maintained Market Perform rating.
In other recent news, Verisk Analytics reported its fourth-quarter 2024 earnings, showcasing a slight beat on revenue forecasts with a total of $736 million, surpassing the expected $733.53 million. However, the company’s earnings per share (EPS) came in at $1.61, just below the $1.60 forecast. The company’s subscription revenues notably increased by 11% during the quarter, contributing to an overall revenue growth of 8.6% year-over-year. Morgan Stanley (NYSE:MS) analysts recently adjusted their outlook for Verisk, raising the stock price target to $305 while maintaining an Equalweight rating, highlighting the company’s strong subscription growth.
Verisk’s adjusted EBITDA margin improved to 54.1%, reflecting a rise of 70 basis points, and the company achieved a record free cash flow of $920 million for the full year. Looking ahead, Verisk projects consolidated revenue for 2025 to be between $3,030 million and $3,080 million, with an expected adjusted EBITDA of $1,670 million to $1,720 million. The company’s future guidance suggests continued growth with an EPS forecast between $6.80 and $7.10. Despite these positive developments, Verisk’s stock experienced a 4.74% decline in pre-market trading, indicating investor concerns over future growth prospects. The company remains focused on strategic investments in data and technology to enhance its service offerings.
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