A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
Verisk Analytics, Inc. (VRSK - Free Report) , a business-information services company, performed extremely well over the past year and has the potential to carry the momentum forward. Therefore, if you have not taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Verisk Analytics an Attractive Pick?
An Outperformer: A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse on a year-over-year basis. Verisk Analytics has returned 31.9%, which compared favorably with the S&P 500’s gain of 10.9%.
Northward Estimate Revisions: Eight estimates for the current year moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2018 increased 11.2%.
Positive Earnings Surprise History: Verisk Analytics has an impressive earnings surprise history. The company outpaced the consensus mark in three of the trailing four quarters, delivering a positive average earnings surprise of 3.2%.
Strong Growth Prospects: The Zacks Consensus Estimate for 2018 earnings is currently pegged at $3.97, reflecting year-over-year growth of 23.7%. In 2019, the metric is expected to increase 10.9%. The stock has a long-term expected earnings growth rate of 11% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Robust Growth Factors: Verisk Analytics intends to create long-term value through organic growth and better return on invested capital. To this end, the company is continuously trying to expand its portfolio by leveraging its deep knowledge and embedded position to develop new, proprietary data sets and predictive analytics.
This is achievable by coordinating with customers to understand their evolving needs. Over the past decade, the company recorded average organic revenue growth of about 8%.
Verisk Analytics, Inc. Revenue (TTM)
Also, Verisk Analytics continues to expand its footprint in new markets, with healthy long-term growth potential, through targeted international expansion. Of late, the company acquired PowerAdvocate for $200 million to augment its presence in the energy sector. This buyout is anticipated to bring more enterprises in the energy sector within Verisk Analytics’s reach by incorporating PowerAdvocate’s spend data and cost models.
The deal will also add to Verisk Analytics’s existing pool of customers, thus giving it greater access to the global markets. Additionally, the company’s revenues are likely to increase significantly as a result of this acquisition, providing greater market strength.
Notably, Verisk Analytics has a recurring revenue stream with 75% of its total revenues generated through subscription and long-term contracts. Moreover, it has a large and diverse addressable market with low customer concentration that mitigates operating risks.
In fact, to operate in an industry with high barriers, Verisk Analytics also has an integrated research, sales & marketing, and consulting model designed to best serve client needs. Thereby, allowing it to offer a steady stream of first-to-market innovations that provide a competitive advantage against its rivals.
Other Stocks to Consider
Some other top-ranked stocks in the broader Business Services sector include CRA International (CRAI - Free Report) , FTI Consulting (FCN - Free Report) and NV5 Global (NVEE - Free Report) , each sporting a Zacks Rank of 1.
In the trailing four quarters, CRA International, FTI Consulting and NV5 Globalhave delivered a positive earnings surprise of 28%, 6.1% and 5.8%, respectively.
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