We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Investors Should Hold on to Verisk (VRSK) Stock
Read MoreHide Full Article
Shares of Verisk Analytics, Inc. (VRSK - Free Report) have gained 37% over the past year, significantly outperforming 7.5% rally of the industry it belongs to and 16.7% growth of the Zacks S&P 500 composite.
The company has an expected long-term earnings per share (three to five years) growth rate of 10.9%. Further, earnings are anticipated to register 15.5% growth in 2020 and 8.4% in 2021.
Factors Behind the Rally
Verisk has a robust growth strategy that focuses on organic growth, product development and acquisitions. This strategy has enabled the company to grow its revenues at a compound annual growth rate of 10.3% over the past five years. The company continues to invest in people, data sets, analytic solutions, technology and complementary businesses with a view to keep itself updated with changing requirements in the markets it serves. The company is maintaining its focus on increasing solution penetration with customers, developing new proprietary data base and predictive analytics, and expanding in to new customer sectors.
Verisk has developed several advantages for itself that help strengthen its client base and fend off competition. Using advanced technologies to collect and analyze 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. Specialized and in-depth knowledge in markets such as energy, insurance, financial services and risk management adds value to its analytics. Steady stream of first-to-market innovations and the ability to deeply integrate into customer workflows allows the company to strengthen its client base over time. All these initiatives augur well for long-term growth and stability of the company.
Some Risks
Verisk has a debt-laden balance sheet. Total debt at the end of third-quarter 2020 was $3.16 billion, compared with $3.14 billion at the end of the prior quarter. Total-debt-to-total-capital ratio of 0.59 is higher than the industry’s 0.57. A high debt-to-capitalization ratio indicates higher risk of insolvency in challenging times.
Further, the company’s cash and cash equivalent of $222 million at the end of the third quarter was well below this debt level, underscoring that the company doesn’t have enough cash to meet this debt burden. Also, the cash level can’t meet the short-term debt of $460 million.
Long-term earnings (three to five years) growth rate for Republic Services, Gartner and Insperity is estimated at 9.4%, 13.5% and 15%, respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Here's Why Investors Should Hold on to Verisk (VRSK) Stock
Shares of Verisk Analytics, Inc. (VRSK - Free Report) have gained 37% over the past year, significantly outperforming 7.5% rally of the industry it belongs to and 16.7% growth of the Zacks S&P 500 composite.
The company has an expected long-term earnings per share (three to five years) growth rate of 10.9%. Further, earnings are anticipated to register 15.5% growth in 2020 and 8.4% in 2021.
Factors Behind the Rally
Verisk has a robust growth strategy that focuses on organic growth, product development and acquisitions. This strategy has enabled the company to grow its revenues at a compound annual growth rate of 10.3% over the past five years. The company continues to invest in people, data sets, analytic solutions, technology and complementary businesses with a view to keep itself updated with changing requirements in the markets it serves. The company is maintaining its focus on increasing solution penetration with customers, developing new proprietary data base and predictive analytics, and expanding in to new customer sectors.
Verisk has developed several advantages for itself that help strengthen its client base and fend off competition. Using advanced technologies to collect and analyze 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. Specialized and in-depth knowledge in markets such as energy, insurance, financial services and risk management adds value to its analytics. Steady stream of first-to-market innovations and the ability to deeply integrate into customer workflows allows the company to strengthen its client base over time. All these initiatives augur well for long-term growth and stability of the company.
Some Risks
Verisk has a debt-laden balance sheet. Total debt at the end of third-quarter 2020 was $3.16 billion, compared with $3.14 billion at the end of the prior quarter. Total-debt-to-total-capital ratio of 0.59 is higher than the industry’s 0.57. A high debt-to-capitalization ratio indicates higher risk of insolvency in challenging times.
Further, the company’s cash and cash equivalent of $222 million at the end of the third quarter was well below this debt level, underscoring that the company doesn’t have enough cash to meet this debt burden. Also, the cash level can’t meet the short-term debt of $460 million.
Zacks Rank and Stocks to Consider
Verisk currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Republic Services (RSG - Free Report) , Gartner (IT - Free Report) and Insperity (NSP - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Long-term earnings (three to five years) growth rate for Republic Services, Gartner and Insperity is estimated at 9.4%, 13.5% and 15%, respectively.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>