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Is VRSK Worth Buying as Recurring Revenue Battles a Premium Valuation?
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Key Takeaways
Verisk's subscriptions reached 83% of Q2 revenues, while organic constant-currency growth was 8%.
VRSK trades at 21.7X forward earnings, above sub-industry and sector averages of 18.8X and 18.1X.
Verisk's operating cash flow rose 49.7% to $366M, while net interest expense increased to $52.8M.
Verisk Analytics, Inc. (VRSK - Free Report) offers investors a durable subscription model, improving operating trends and strong cash generation. The question is whether those qualities justify paying more than key valuation benchmarks.
The trade-off is clear. Recurring revenues and product investment support visibility, but higher financing costs and operating expenses raise the execution bar at a still-premium multiple.
VRSK Builds on a Subscription-Led Revenue Base
Subscription revenues represented 83% of second-quarter 2026 revenues, up from 82% a year earlier, and grew 8% on an organic constant-currency basis. The mix strengthens predictability because subscription fees are generally paid in advance, while renewal pricing is supported by product and data enhancements.
Deferred revenues rose to $573.9 million at June 30, 2026, from $444.2 million at the end of 2025. That increase, along with annual price increases tied to enhancements in forms, rules and loss-cost services, gives Verisk a firmer base for revenue visibility.
Verisk Couples Growth With Strong Cash Generation
Second-quarter revenues increased 4.3% year over year to $806.3 million, while adjusted earnings rose 5.3% to $1.98 per share. Adjusted EBITDA climbed 4.2% to $463.6 million, with the margin at 57.5%, underscoring continued operating discipline.
Cash conversion was a bigger positive. Operating cash flow jumped 49.7% to $366 million and free cash flow advanced 57.9% to $297.9 million. That capacity supports investment in software, artificial intelligence and scalable technology while funding dividends and share repurchases.
VRSK Still Commands a Valuation Premium
VRSK trades at 21.7X forward 12-month earnings, above the Zacks sub-industry average of 18.8X and the Zacks sector average of 18.1X. The premium means investors are already paying for a meaningful measure of business quality and recurring-revenue resilience.
The multiple is less demanding relative to Verisk’s own history. Its five-year median is 35.6X, with the range spanning 19.6X to 43.5X. Even so, a valuation above current peer benchmarks leaves less room for disappointment if growth or margins soften.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Verisk Faces Higher Debt and Margin Pressures
Total debt stood at $4.47 billion at June 30, 2026, including $4.22 billion of long-term debt and $257.7 million of short-term debt. Net interest expense rose to $52.8 million in the second quarter from $35.5 million a year earlier, increasing the cost of carrying that leverage.
Image Source: Zacks Investment Research
Cost pressure is another offset. Cost of revenues increased 1.7% year over year, partly on higher personnel, benefits and information-technology expenses, while selling, general and administrative expenses rose 20.8% on legal fees, advisory costs and acquisition-related expenses.
VRSK Signals Favor Selectivity Over Aggression
The operating backdrop supports patience rather than an aggressive entry. Guidewire Software, Inc. (GWRE - Free Report) also serves property and casualty insurers with core software and analytics, while CCC Intelligent Solutions Holdings Inc. (CCC - Free Report) uses cloud, data and artificial intelligence across insurance claims and repair workflows. Those peers highlight the broader push toward embedded insurance technology and automation.
VRSK carries a VGM Score of B, Growth Score of B, Momentum Score of B and Value Score of C. A #3 rank can support holding a stock, while the B scores point to favorable growth and momentum characteristics. The Value Score of C is more neutral, fitting a stock with solid operating quality but a valuation that still warrants selectivity.
View the Zacks #1 Rank List
Image: Bigstock
Is VRSK Worth Buying as Recurring Revenue Battles a Premium Valuation?
Key Takeaways
Verisk Analytics, Inc. (VRSK - Free Report) offers investors a durable subscription model, improving operating trends and strong cash generation. The question is whether those qualities justify paying more than key valuation benchmarks.
The trade-off is clear. Recurring revenues and product investment support visibility, but higher financing costs and operating expenses raise the execution bar at a still-premium multiple.
VRSK Builds on a Subscription-Led Revenue Base
Subscription revenues represented 83% of second-quarter 2026 revenues, up from 82% a year earlier, and grew 8% on an organic constant-currency basis. The mix strengthens predictability because subscription fees are generally paid in advance, while renewal pricing is supported by product and data enhancements.
Deferred revenues rose to $573.9 million at June 30, 2026, from $444.2 million at the end of 2025. That increase, along with annual price increases tied to enhancements in forms, rules and loss-cost services, gives Verisk a firmer base for revenue visibility.
Verisk Couples Growth With Strong Cash Generation
Second-quarter revenues increased 4.3% year over year to $806.3 million, while adjusted earnings rose 5.3% to $1.98 per share. Adjusted EBITDA climbed 4.2% to $463.6 million, with the margin at 57.5%, underscoring continued operating discipline.
Verisk Analytics, Inc. Revenue (Quarterly)
Verisk Analytics, Inc. revenue-quarterly | Verisk Analytics, Inc. Quote
Verisk Analytics, Inc. EPS Diluted (Quarterly)
Verisk Analytics, Inc. eps-diluted | Verisk Analytics, Inc. Quote
Cash conversion was a bigger positive. Operating cash flow jumped 49.7% to $366 million and free cash flow advanced 57.9% to $297.9 million. That capacity supports investment in software, artificial intelligence and scalable technology while funding dividends and share repurchases.
VRSK Still Commands a Valuation Premium
VRSK trades at 21.7X forward 12-month earnings, above the Zacks sub-industry average of 18.8X and the Zacks sector average of 18.1X. The premium means investors are already paying for a meaningful measure of business quality and recurring-revenue resilience.
The multiple is less demanding relative to Verisk’s own history. Its five-year median is 35.6X, with the range spanning 19.6X to 43.5X. Even so, a valuation above current peer benchmarks leaves less room for disappointment if growth or margins soften.
Verisk Faces Higher Debt and Margin Pressures
Total debt stood at $4.47 billion at June 30, 2026, including $4.22 billion of long-term debt and $257.7 million of short-term debt. Net interest expense rose to $52.8 million in the second quarter from $35.5 million a year earlier, increasing the cost of carrying that leverage.
Cost pressure is another offset. Cost of revenues increased 1.7% year over year, partly on higher personnel, benefits and information-technology expenses, while selling, general and administrative expenses rose 20.8% on legal fees, advisory costs and acquisition-related expenses.
VRSK Signals Favor Selectivity Over Aggression
The operating backdrop supports patience rather than an aggressive entry. Guidewire Software, Inc. (GWRE - Free Report) also serves property and casualty insurers with core software and analytics, while CCC Intelligent Solutions Holdings Inc. (CCC - Free Report) uses cloud, data and artificial intelligence across insurance claims and repair workflows. Those peers highlight the broader push toward embedded insurance technology and automation.
VRSK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
VRSK carries a VGM Score of B, Growth Score of B, Momentum Score of B and Value Score of C. A #3 rank can support holding a stock, while the B scores point to favorable growth and momentum characteristics. The Value Score of C is more neutral, fitting a stock with solid operating quality but a valuation that still warrants selectivity.