Slower Revenue Growth Impacted Verisk Analytics (VRSK) Performance in Q3

Baron Funds, an investment management company, released its “Baron Focused Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund delivered strong results in the third quarter, appreciating 4.83% (Institutional Shares); however, the performance underperformed the Russell 2500 Growth Index’s (the Benchmark) 10.73% gain. The fund's underperformance stemmed from concerns over a slowdown in economic growth affecting the fund’s more economically sensitive Consumer Discretionary stocks. Furthermore, the rise in competitive pressures has adversely affected the valuations of a few of its holdings. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron Focused Growth Fund highlighted stocks such as Verisk Analytics, Inc. (NASDAQ:VRSK). Verisk Analytics, Inc. (NASDAQ:VRSK) offers data analytics and technology solutions to the insurance industry. The one-month return of Verisk Analytics, Inc. (NASDAQ:VRSK) was -9.64%, and its shares lost 21.18% of their value over the last 52 weeks. On November 4, 2025, Verisk Analytics, Inc. (NASDAQ:VRSK) stock closed at $220.00 per share, with a market capitalization of $30.662 billion.

Baron Focused Growth Fund stated the following regarding Verisk Analytics, Inc. (NASDAQ:VRSK) in its third quarter 2025 investor letter:

"Shares of Verisk Analytics, Inc. (NASDAQ:VRSK), a leading data and analytics vendor, declined 19.1% in the quarter and hurt performance by 51 bps. The decline was due to concerns of a deceleration in revenue growth in the second half of the year due to softer insurance market as well as a large acquisition the company made in the quarter to expand its product pipeline and accelerate growth in the coming years. However, while the revenue growth concerns are valid, it is only a difference in growth of 50 bps depending on whether they are selling into a strong or softer insurance market. The company continues to generate strong high single-digit revenue growth and remains upbeat on their pipeline of new products moving forward. We believe that Verisk is well positioned around AI given they are a necessary asset for insurance companies in the property and casualty insurance ecosystem and the deeply proprietary nature of many of their data assets. We still believe the company is well positioned for long-term growth, margin expansion, and strong returns on investments over the coming years."

Verisk Analytics, Inc. (NASDAQ:VRSK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 49 hedge fund portfolios held Verisk Analytics, Inc. (NASDAQ:VRSK) at the end of the second quarter, compared to 45 in the previous quarter. In the third quarter of 2025, Verisk Analytics, Inc. (NASDAQ:VRSK) generated $768 million in revenue, representing an increase of 5.9% from Q3 2024. While we acknowledge the potential of Verisk Analytics, Inc. (NASDAQ:VRSK) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Verisk Analytics, Inc. (NASDAQ:VRSK) and shared Conestoga Capital Advisors' views on the company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.