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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 its investments in advanced technologies and complementary businesses.

Verisk recently reported second-quarter 2021 results, where its adjusted earnings per share of $1.17 missed the Zacks Consensus Estimate by 12.7% and declined 9.3% on a year-over-year basis. Revenues of $747.5 million missed the consensus estimate by 2% and increased 10.1% year over year.

The company’s shares have gained 4.5% over the past six months, underperforming the 17.4% rally of the industry it belongs to.

How is Verisk Doing?

Verisk remains focused on organic growth, product development and acquisitions. 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. Such initiatives have helped Verisk increase its revenues at a compound annual growth rate of 10.3% over the past five years.

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 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’s cash and cash equivalent balance of $276 million at the end of second-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 $403 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 Accenture (ACN - Free Report) , Equifax (EFX - Free Report)  and TransUnion (TRU - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected earnings per share (three to five years) growth rate for Accenture, Equifax and TransUnion is 10.1%, 15.2% and 22%, respectively.


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Accenture PLC (ACN) - free report >>

Equifax, Inc. (EFX) - free report >>

Verisk Analytics, Inc. (VRSK) - free report >>

TransUnion (TRU) - free report >>