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Verisk (VRSK) Down 11.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Verisk Analytics (VRSK - Free Report) . Shares have lost about 11.5% in that time frame, underperforming the S&P 500.
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's Q1 Earnings Miss Estimates
Verisk Analytics reported mixed first-quarter 2022 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same.
Adjusted earnings per share (excluding $1.79 from non-recurring items) of $1.34 missed the consensus mark by 3.6% but grew 8.9% on a year-over-year basis. The upside was backed by organic growth within the business, lower interest expenses and a lower average share count.
Revenues of $775.5 million beat the consensus estimate by 0.7% and increased 6.8% year over year on a reported basis and 5.3% on an organic constant-currency (cc) basis.
Segmental Performance
Insurance segment revenues totaled $586.4 million, up 9.5% year over year on a reported basis and 6.1% on an organic cc basis.
Within the segment, underwriting and rating revenues of $416 million rose 10.3% on a reported basis and 6.4% on an organic cc basis. The upside was primarily driven by an annual increase in prices derived from continued enhancements of the solutions’ contents within the industry-standard insurance programs and the sale of expanded solutions to existing customers in commercial and personal lines.
Claims revenues amounted to $170.4 million, improving 7.5% on a reported basis and 5.3% on an organic cc basis. The top line was primarily driven by claims analytics revenues and property estimating solutions.
Energy and Specialized Markets segment’s revenues of $154.3 million decreased 1.2% year over year on a reported basis but increased 1.9% on an organic cc basis. The uptick in organic cc basis was primarily driven by subscription and consulting revenues.
Financial Services segment’s revenues of $34.8 million grew 1.6% year over year. The segment’s growth was primarily on portfolio management and spend informed analytics, offset by lower bankruptcy volumes.
Operating Results
Adjusted EBITDA of $359.3 million increased 4% on a reported basis and 4.1% on an organic cc basis. Adjusted EBITDA margin fell to 46.3% from 47.6% in the prior-year quarter.
Balance Sheet and Cash Flow
Verisk exited first-quarter 2022 with cash and cash equivalents of $397.9 million compared with $280.3 million at the end of the prior-year quarter. Long-term debt was $2.34 billion, flat with the prior-year quarter’s level.
Verisk generated $399.6 million of cash from operating activities while capex was $60 million. Free cash flow was $339.6 million.
Share Repurchase & Dividend Payout
During the March quarter, Verisk paid out a total cash dividend of $49.4 million.
In the reported quarter, VRSK bought back approximately 3,053 thousand shares at an average price of $187.17 for a total cost of $571.3 million for the first quarter of 2022. As of Mar 31, 2022, VRSK had $1,032.5 million remaining under the share repurchase authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Verisk has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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. Notably, Verisk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Verisk (VRSK) Down 11.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Verisk Analytics (VRSK - Free Report) . Shares have lost about 11.5% in that time frame, underperforming the S&P 500.
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's Q1 Earnings Miss Estimates
Verisk Analytics reported mixed first-quarter 2022 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same.
Adjusted earnings per share (excluding $1.79 from non-recurring items) of $1.34 missed the consensus mark by 3.6% but grew 8.9% on a year-over-year basis. The upside was backed by organic growth within the business, lower interest expenses and a lower average share count.
Revenues of $775.5 million beat the consensus estimate by 0.7% and increased 6.8% year over year on a reported basis and 5.3% on an organic constant-currency (cc) basis.
Segmental Performance
Insurance segment revenues totaled $586.4 million, up 9.5% year over year on a reported basis and 6.1% on an organic cc basis.
Within the segment, underwriting and rating revenues of $416 million rose 10.3% on a reported basis and 6.4% on an organic cc basis. The upside was primarily driven by an annual increase in prices derived from continued enhancements of the solutions’ contents within the industry-standard insurance programs and the sale of expanded solutions to existing customers in commercial and personal lines.
Claims revenues amounted to $170.4 million, improving 7.5% on a reported basis and 5.3% on an organic cc basis. The top line was primarily driven by claims analytics revenues and property estimating solutions.
Energy and Specialized Markets segment’s revenues of $154.3 million decreased 1.2% year over year on a reported basis but increased 1.9% on an organic cc basis. The uptick in organic cc basis was primarily driven by subscription and consulting revenues.
Financial Services segment’s revenues of $34.8 million grew 1.6% year over year. The segment’s growth was primarily on portfolio management and spend informed analytics, offset by lower bankruptcy volumes.
Operating Results
Adjusted EBITDA of $359.3 million increased 4% on a reported basis and 4.1% on an organic cc basis. Adjusted EBITDA margin fell to 46.3% from 47.6% in the prior-year quarter.
Balance Sheet and Cash Flow
Verisk exited first-quarter 2022 with cash and cash equivalents of $397.9 million compared with $280.3 million at the end of the prior-year quarter. Long-term debt was $2.34 billion, flat with the prior-year quarter’s level.
Verisk generated $399.6 million of cash from operating activities while capex was $60 million. Free cash flow was $339.6 million.
Share Repurchase & Dividend Payout
During the March quarter, Verisk paid out a total cash dividend of $49.4 million.
In the reported quarter, VRSK bought back approximately 3,053 thousand shares at an average price of $187.17 for a total cost of $571.3 million for the first quarter of 2022. As of Mar 31, 2022, VRSK had $1,032.5 million remaining under the share repurchase authorization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Verisk has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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. Notably, Verisk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.