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Can Higher Analytics Revenues Aid Verisk (VRSK) Q3 Earnings?
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Business information services firm Verisk Analytics, Inc. (VRSK - Free Report) is scheduled to report third-quarter 2017 results after the closing bell on Oct 31. The company is likely to report higher revenues due to improved demand for its products.
This, in turn, is likely to result in higher earnings for the quarter.
Top-Line Improvement
Using advanced technologies to collect and analyze troves of data, Verisk draws on unique data assets and deep domain expertise to provide predictive analytics and decision support solutions that are integrated into customer workflows. These facilitate its customers to take informed decisions with greater precision, efficiency, and discipline about various risks involved in the businesses. In order to create long-term value for its clients, the company has extended its scalable data and analytic solutions by steadily putting resources into overseas markets. The scalability of its products has further led to highly cash-generative businesses characterized by high net margins and relatively low capital intensity.
Verisk has a recurring revenue stream with 75% of its total revenues generated through subscription and long-term contracts. In addition, the company has a large and diverse addressable market with low customer concentration that mitigates operating risks. Operating in an industry with high barriers to entry, Verisk has an integrated research, sales & marketing, and consulting model designed to best serve its clients’ needs. This enables it to offer a steady stream of first-to-market innovations that provide a competitive advantage against its rivals.
The Zacks Consensus Estimate for Decision Analytics segment revenues is currently pegged at $336 million, up from $317 million reported in the year-ago quarter. Revenues from Risk Assessment segment are expected to be $192 million compared with reported revenues of $181 million in the year-earlier quarter.
Other Key Factors
During the quarter, Verisk inked a definitive agreement to acquire LCI, a premier provider of risk insight, prediction, and management solutions for banks and creditors. This would enable Verisk to introduce improved insights, proprietary decision-making algorithms and state-of-the-art risk management workflow solutions for banking clients. The company also acquired Sequel, a premier insurance and reinsurance software specialist based in London. The strategic transaction will enable Verisk to strengthen its footprint in the U.K. and further expand its comprehensive offerings to the global complex commercial and specialty insurance industry.
Our proven model conclusively shows that Verisk is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is perfectly the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.29% as the former is pegged at 79 cents and the latter at 78 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Verisk has a Zacks Rank #3. This increases the predictive power of ESP and makes us reasonably confident of an earnings beat.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Eaton Vance Corp. (EV - Free Report) has an Earnings ESP of +0.57% and a Zacks Rank #3.
TELUS Corporation (TU - Free Report) has an Earnings ESP of +4.91% and a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can Higher Analytics Revenues Aid Verisk (VRSK) Q3 Earnings?
Business information services firm Verisk Analytics, Inc. (VRSK - Free Report) is scheduled to report third-quarter 2017 results after the closing bell on Oct 31. The company is likely to report higher revenues due to improved demand for its products.
This, in turn, is likely to result in higher earnings for the quarter.
Top-Line Improvement
Using advanced technologies to collect and analyze troves of data, Verisk draws on unique data assets and deep domain expertise to provide predictive analytics and decision support solutions that are integrated into customer workflows. These facilitate its customers to take informed decisions with greater precision, efficiency, and discipline about various risks involved in the businesses. In order to create long-term value for its clients, the company has extended its scalable data and analytic solutions by steadily putting resources into overseas markets. The scalability of its products has further led to highly cash-generative businesses characterized by high net margins and relatively low capital intensity.
Verisk has a recurring revenue stream with 75% of its total revenues generated through subscription and long-term contracts. In addition, the company has a large and diverse addressable market with low customer concentration that mitigates operating risks. Operating in an industry with high barriers to entry, Verisk has an integrated research, sales & marketing, and consulting model designed to best serve its clients’ needs. This enables it to offer a steady stream of first-to-market innovations that provide a competitive advantage against its rivals.
The Zacks Consensus Estimate for Decision Analytics segment revenues is currently pegged at $336 million, up from $317 million reported in the year-ago quarter. Revenues from Risk Assessment segment are expected to be $192 million compared with reported revenues of $181 million in the year-earlier quarter.
Other Key Factors
During the quarter, Verisk inked a definitive agreement to acquire LCI, a premier provider of risk insight, prediction, and management solutions for banks and creditors. This would enable Verisk to introduce improved insights, proprietary decision-making algorithms and state-of-the-art risk management workflow solutions for banking clients. The company also acquired Sequel, a premier insurance and reinsurance software specialist based in London. The strategic transaction will enable Verisk to strengthen its footprint in the U.K. and further expand its comprehensive offerings to the global complex commercial and specialty insurance industry.
Our proven model conclusively shows that Verisk is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is perfectly the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.29% as the former is pegged at 79 cents and the latter at 78 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Verisk has a Zacks Rank #3. This increases the predictive power of ESP and makes us reasonably confident of an earnings beat.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
KEMET Corporation (KEM - Free Report) has an Earnings ESP of +7.46% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Eaton Vance Corp. (EV - Free Report) has an Earnings ESP of +0.57% and a Zacks Rank #3.
TELUS Corporation (TU - Free Report) has an Earnings ESP of +4.91% and a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>