It has been about a month since the last earnings report for Verisk Analytics (VRSK). Shares have lost about 4.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Verisk due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Verisk Q2 Earnings Surpass Estimates
Verisk Analytics Inc. has reported impressive second-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
VRSK’s adjusted earnings were $1.88 per share, surpassing the Zacks Consensus Estimate by 6.2% and increasing 8.1% from the year-ago quarter. Total revenues of $772.6 million beat the consensus estimate marginally and increased 7.8% on a year-over-year basis.
Quarterly Details of Verisk Analytics
Underwriting and Rating revenues registered year-over-year increases of 8.3% on a reported basis and 7.7% at organic constant currency (OCC) to $550 million, surpassing our estimate of $538.5 million. Claim revenues increased 6.6% on a reported basis and 8.3% at OCC to $223 million, and missed our estimate of $228.5 million.
Adjusted EBITDA gained 11.9% from the year-ago quarter on a reported basis and 9.7% an OCC basis to $445 million, surpassing our estimate of $427.4 million. The adjusted EBITDA margin was 57.6%, increasing from the year-ago quarter’s 55.4%.
Verisk exited the reported quarter with cash and cash equivalents of $628.7 million compared with $1.1 billion at the end of the first quarter of fiscal 2025. The long-term debt was $3.2 billion, flat with the preceding quarter.
Net cash utilized from operating activities was $244.5 million. The free cash flow used during the quarter was $188.7 million. The company repurchased shares worth $100 million in the quarter and returned $63 million as dividends to shareholders.
VRSK’s FY25 Guidance
For fiscal 2025, Verisk hiked the revenues view to $3.09-$3.12 billion from the $3.03-$3.08 billion provided in the preceding quarter. The adjusted EBITDA forecast is increased to $1.70-$1.74 billion from the preceding quarter’s view of $1.67-$1.72 billion. The adjusted EBITDA margin is anticipated to be 55-55.8%.
The adjusted earnings per share (EPS) growth view is updated to $6.80-$7.00 from the $6.80-$7.10 provided in the previous quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Verisk has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Verisk has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Verisk Analytics, Inc. (VRSK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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