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Why Is Verisk (VRSK) Down 1.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Verisk Analytics (VRSK - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Verisk due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Verisk Q4 Earnings Miss
Verisk Analytics Inc. reported mixed fourth-quarter 2023 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.
Adjusted earnings were $1.4 per share, missing the Zacks Consensus Estimate by 1.4% and decreasing 2.1% year over year. The decline in adjusted EPS was due to a one-time tax benefit of around $30.3 million in the fourth quarter of 2022 and increased depreciation expense.
Total revenues of $677.2 million surpassed the consensus estimate by 1% and increased 7.4% year over year on a reported basis and 6% on an organic constant currency (OCC) basis.
Quarter Details
Underwriting and Rating revenues saw an uptick of 7.8% year over year on a reported basis and 7.3% at OCC to $479 million, beating our estimate of $465.6 million. Claim revenues increased 6.6% on a reported basis and 2.8% at OCC to $198.2 million and surpassed our estimate of $189.9 million.
Adjusted EBITDA grew 9% year over year on a reported basis and 6.5% at OCC to $362 million, beating our estimate by 2.1%. The adjusted EBITDA margin was 53.4%, increasing 70 basis points from the year-ago figure but fell short of our estimated 54.5%.
The company exited the quarter with cash and cash equivalents of $302.7 million compared with $416.8 million held at the end of the previous quarter. Long-term debt was $2.9 billion, flat with the prior quarter's tally.
Net cash generated from operating activities was $252.4 million. Free cash flow generated during the quarter was $196.1 million. The company repurchased shares of $250 million in the quarter and returned $48.9 million as dividends to shareholders.
2024 Guidance
The company expects revenues to be in the range of $2.84-$2.90 billion. Adjusted EBITDA is expected to be in the band of $1.54-$1.60 billion. The expected adjusted EBITDA margin is in the band of 54-55%. Adjusted EPS expectation is between $6.3 and $6.6.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, Verisk has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Verisk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Verisk is part of the Zacks Business - Information Services industry. Over the past month, TransUnion (TRU - Free Report) , a stock from the same industry, has gained 6.1%. The company reported its results for the quarter ended December 2023 more than a month ago.
TransUnion reported revenues of $954.3 million in the last reported quarter, representing a year-over-year change of +5.8%. EPS of $0.80 for the same period compares with $0.78 a year ago.
TransUnion is expected to post earnings of $0.81 per share for the current quarter, representing a year-over-year change of +1.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.9%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for TransUnion. Also, the stock has a VGM Score of C.
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Why Is Verisk (VRSK) Down 1.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Verisk Analytics (VRSK - Free Report) . Shares have lost about 1.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Verisk due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Verisk Q4 Earnings Miss
Verisk Analytics Inc. reported mixed fourth-quarter 2023 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.
Adjusted earnings were $1.4 per share, missing the Zacks Consensus Estimate by 1.4% and decreasing 2.1% year over year. The decline in adjusted EPS was due to a one-time tax benefit of around $30.3 million in the fourth quarter of 2022 and increased depreciation expense.
Total revenues of $677.2 million surpassed the consensus estimate by 1% and increased 7.4% year over year on a reported basis and 6% on an organic constant currency (OCC) basis.
Quarter Details
Underwriting and Rating revenues saw an uptick of 7.8% year over year on a reported basis and 7.3% at OCC to $479 million, beating our estimate of $465.6 million. Claim revenues increased 6.6% on a reported basis and 2.8% at OCC to $198.2 million and surpassed our estimate of $189.9 million.
Adjusted EBITDA grew 9% year over year on a reported basis and 6.5% at OCC to $362 million, beating our estimate by 2.1%. The adjusted EBITDA margin was 53.4%, increasing 70 basis points from the year-ago figure but fell short of our estimated 54.5%.
The company exited the quarter with cash and cash equivalents of $302.7 million compared with $416.8 million held at the end of the previous quarter. Long-term debt was $2.9 billion, flat with the prior quarter's tally.
Net cash generated from operating activities was $252.4 million. Free cash flow generated during the quarter was $196.1 million. The company repurchased shares of $250 million in the quarter and returned $48.9 million as dividends to shareholders.
2024 Guidance
The company expects revenues to be in the range of $2.84-$2.90 billion. Adjusted EBITDA is expected to be in the band of $1.54-$1.60 billion. The expected adjusted EBITDA margin is in the band of 54-55%. Adjusted EPS expectation is between $6.3 and $6.6.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, Verisk has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Verisk has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Verisk is part of the Zacks Business - Information Services industry. Over the past month, TransUnion (TRU - Free Report) , a stock from the same industry, has gained 6.1%. The company reported its results for the quarter ended December 2023 more than a month ago.
TransUnion reported revenues of $954.3 million in the last reported quarter, representing a year-over-year change of +5.8%. EPS of $0.80 for the same period compares with $0.78 a year ago.
TransUnion is expected to post earnings of $0.81 per share for the current quarter, representing a year-over-year change of +1.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.9%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for TransUnion. Also, the stock has a VGM Score of C.