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Here's Why Investors Should Hold on to Verisk (VRSK) Stock

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Verisk Analytics, Inc.’s (VRSK - Free Report) shares have had a decent run on the bourses over the past year, gaining 13.9% compared with 13.7% growth of the industry it belongs to.

The company has an expected long-term earnings per share (three to five years) growth rate of 12%. Its earnings are expected to increase 4% in 2021 and 13.7% in 2022 year over year.

Verisk Analytics, Inc. Price

Factors That Auger Well

Verisk has a robust growth strategy that focuses on organic growth, product development and acquisitions. 

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. The company’s specialized and in-depth knowledge in markets such as energy, insurance, financial services and risk management adds value to its analytics. A steady stream of first-to-market innovations and the ability to deeply integrate into customer workflows, allowing it to strengthen its client base over time.

Verisk has been consistently acquiring and investing in companies globally to expand data and analytics capabilities across industries. The recent acquisition of assets and capabilities of 4C Solutions will help the company to expand into the group life insurance market. The 2020 acquisition of Franco Signor should help Verisk strengthen its foothold in the Medicare space.

Some Risks

Verisk’s cash and cash equivalent balance of $302.1 million at the end of third-quarter 2021 was well below its long-term debt level of $2.3 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 $766.6 million.

Zacks Rank and Stocks to Consider

Verisk currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) , Cross Country Healthcare, Inc. (CCRN - Free Report) and CRA International, Inc. (CRAI - Free Report) .

Avis Budget has an expected earnings growth rate of around 453.5% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.

Avis Budget’s shares have surged 478.6% in the past year. CAR has a long-term earnings growth of 18.8%. CAR sports a Zacks Rank #1.

Cross Country Healthcare has an expected earnings growth rate of around 500% for the current year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.

Cross Country Healthcare’s shares have surged 168.6% in the past year. CCRN has a long-term earnings growth of 21.5%. CCRN carries a Zacks Rank #1.

CRA International has an expected earnings growth rate of around 61.2% for the current year. CRAI has a trailing four-quarter earnings surprise of 51%, on average.

CRA International’s shares have surged 77.9% in the past year. CRAI has a long-term earnings growth of 15.5%. The stock carries a Zacks Rank #2 (Buy).