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Verisk (VRSK) to Report Q1 Earnings: Will It Disappoint?

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Verisk Analytics, Inc. (VRSK - Free Report) is scheduled to report first-quarter 2019 results on Apr 30, after market close.

While strength across Insurance and Energy and Specialized Markets segments should boost the company’s top line, the bottom line is likely to be positively impacted by solid organic growth and contribution from acquisitions.

So far this year, shares of Verisk have gained 27.9%, outperforming the 23.7% rise of the industry it belongs to and 16.5% increase of the Zacks S&P 500 Composite.

 

Let’s check out the expectations in detail.

Segmental Growth to Drive the Top Line

The Zacks Consensus Estimate for first-quarter 2019 revenues stands at $620.59 million, indicating growth of 6.8% from the year-ago reported figure. Strength in Insurance and Energy and Specialized Markets segments should boost the top line. The segments are also expected to improve organically as well as on an organic constant-currency basis.

Insurance segment revenues are expected to be driven by strength across its two units — Underwriting & Rating and Claims. While strength in the company’s catastrophe modeling services and underwriting solutions should boost Underwriting & Rating revenues, Claims top line is likely to benefit from repair cost estimating solutions and claims analytics revenues.

Improvement in the energy business’s end market, contributions from environmental health and safety services and weather and climate analytics businesses, and strength in consulting and research businesses are likely to drive Energy and Specialized Markets segment.

The Financial Services segment is likely to be hurt by tough year-over-year comparisons with prior-year implementation revenues as well as some timing differences, which is expected to be partially offset by solid growth in portfolio management solutions and spend informed analytics.

In fourth-quarter 2018, total revenues of $613.9 million increased 7.7% year over year.

Organic Growth & Acquisitions to Drive Bottom Line

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $1.04 per share, indicating growth of 10.6% from the year-ago quarter. The bottom line should benefit from solid organic growth and contribution from acquisitions, which are likely to be partially offset by higher depreciation and amortization expense and rise in interest expense.

In fourth-quarter 2018, adjusted earnings of $1.04 per share decreased 21.8% year over year.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Verisk has a Zacks Rank #4 and an Earnings ESP of -3.85%.

Stocks That Warrant a Look

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings in first-quarter 2019:

SailPoint Technologies (SAIL - Free Report) has an Earnings ESP of +100.00% and a Zacks Rank #1. The company is scheduled to report results on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

EVERTEC (EVTC - Free Report) has an Earnings ESP of +3.73% and a Zacks Rank #3. The company is slated to release results on May 1.

Delphi Technologies (DLPH - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank #3. The company is scheduled to report results on May 2.

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