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Verisk (VRSK) Banking on Growth Strategies, Debt Woe Stays

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Verisk Analytics, Inc. (VRSK - Free Report) is currently benefiting from advanced technologies, product development and acquisitions. However, a debt-laden balance sheet remains a concern for the company.

Verisk recently reported first-quarter 2021 results, with adjusted earnings per share of $1.23 missing the Zacks Consensus Estimate by 1.6% but rising 5.1% on a year-over-year basis. Revenues of $726.1 million missed the consensus estimate by 0.3% but increased 5.3% year over year.

How is Verisk Doing?

Verisk has developed several advantages for itself that help strengthen its client base and fend off competition from the likes of Fiserv , CoreLogic and IHS Markit . Using advanced technologies to collect and analyze data, Verisk draws on its 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 allow the company to strengthen its client base over time. All these initiatives augur well for long-term growth and stability of the company.

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 into new customer sectors.

Verisk’s cash and cash equivalent balance of $390.9 million at the end of first-quarter 2021 was well below its long-term debt level of $2.7 billion, underscoring that the company doesn’t have enough cash to meet this debt burden. The cash level cannot even meet the short-term debt of $464.8 million.

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