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Verisk (VRSK) to Report Q2 Earnings: What's in the Cards?

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Verisk Analytics, Inc. (VRSK - Free Report) is scheduled to report second-quarter 2020 results on Aug 04, after market close.

Strength across Insurance and Energy and Specialized Markets segments is likely to have boosted the company’s top line, while the bottom line is likely to have been positively impacted by solid organic growth.

Let's check out how things have shaped up for the announcement.

Segmental Growth to Drive the Top Line

Verisk’s revenues are likely to have been driven by strength across Insurance and Energy and Specialized Markets segments. The Zacks Consensus Estimate for second-quarter 2020 revenues stands at $683.56 million, indicating growth of 4.7% from the year-ago reported figure.

The consensus estimate for Insurance segment revenues is pegged at $488 million, indicating growth of 4.1% from the prior-year reported figure. Segment revenues are expected to have beedriven by strength across its two units — Underwriting & Rating and Claims.

While strength in the company’s industry-standard insurance programs, property-specific underwriting and catastrophe-modeling solutions is likely to have boosted Underwriting & rating revenues, Claims revenues are likely to have benefited from repair-cost estimating, claims analytics, and remote-imagery solutions revenues.

Within the segment, underwriting and rating revenues are likely to have benefited from rise in prices derived from continued enhancements to the content of the solutions within industry-standard insurance programs, sale of expanded solutions to existing customers in commercial and personal lines as well as contributions from catastrophe-modeling services. Claims revenues might have been aided by claims analytics revenues and repair cost-estimating solutions revenues.

The consensus mark for Energy and Specialized Markets segment revenues is pegged at $153 million, indicating 9.3% increase from the year-ago reported figure. The segment is expected to have benefited from growth in core research, increases in environmental health and safety service revenues as well as weather analytics revenues. These might have been partially offset by a decline in market and cost-intelligence solutions due to implementation projects that did not reoccur, as well as downfall in consulting revenues.

The consensus estimate for Financial Services segment revenues is pegged at $40.92 million, indicating year-over-year decline of 7.6%.

Impact of portfolio transactions (which were closed in the first quarter), downfall in portfolio management and spend-informed analytics might have weighed on segmental revenues. This was partially offset by rise in management information and regulatory reporting as well as fraud and credit risk.

Organic Growth to Drive Bottom Line

Verisk’s bottom line is likely to have benefited from solid organic growth and lower share count. The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $1.18 per share, indicating growth of 7.3% from the year-ago quarter’s reported figure.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Verisk this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Verisk has an Earnings ESP of -1.70% and a Zacks Rank #2.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on second-quarter 2020 earnings.

Broadridge Financial (BR - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aptiv (APTV - Free Report) has an Earnings ESP of +9.08% and a Zacks Rank #3.

Waste Connections (WCN - Free Report) has an Earnings ESP of +5.56% and a Zacks Rank #3.

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