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Is a Beat in the Cards for Verisk (VRSK) in Q2 Earnings?

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

While strength across all 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 37.8%, outperforming the 37% rise of the industry it belongs to and 18.8% increase of the Zacks S&P 500 composite.

Let’s check out the expectations in detail.

Segmental Growth to Drive the Top Line

Verisk’s revenues are likely to be driven by strength across each of the three business segments — Insurance, Energy and Specialized Markets and Financial Services. The Zacks Consensus Estimate for second-quarter 2019 revenues stands at $645.01 million, indicating growth of 7.3% from the year-ago reported figure. In first-quarter 2019, total revenues of $625 million increased 7.5% year over year.

The consensus estimate for Insurance segment revenues is pegged at $463 million, indicating growth of 7.9% from the prior-year reported figure. Segment revenues are expected to be driven by strength across its two units — Underwriting & rating and Claims.

While strength in the company’s industry-standard insurance programs, property-specific underwriting and catastrophe modeling solutions should boost Underwriting & rating revenues, Claims revenues are likely to benefit from repair cost estimating, claims analytics, and remote imagery solutions revenues.

The consensus mark for Energy and Specialized Markets segment revenues is pegged at $136 million, indicating 4.6% increase from the year-ago reported figure. Revenues from environmental health and safety services, market and cost intelligence solutions and core research are expected to aid the segment.  

The consensus estimate for Financial Services segment revenues is pegged at $43.55 million, indicating year-over-year growth of 3.7%. The segment should benefit from solid growth in spend-informed analytics and portfolio management, which is likely to be partially offset by weakness in enterprise data management solutions.

Organic Growth & Acquisitions to Drive Bottom Line

Verisk’s bottom line should benefit from solid organic growth, contribution from acquisitions and lower share count, which are likely to be partially offset by higher depreciation and amortization expense and higher effective tax rate.

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $1.11 per share, indicating growth of 4.7% from the year-ago quarter reported figure. In first-quarter 2019, adjusted earnings of $1.03 per share increased 9.6% year over year.

Our Model Suggests a Beat

Please note that 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 the companies are witnessing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Verisk has a Zacks Rank #3 and an Earnings ESP of +0.10%, a combination that increases the odds of an earnings beat.

Verisk Analytics, Inc. Price and EPS Surprise

Verisk Analytics, Inc. Price and EPS Surprise

 

Verisk Analytics, Inc. price-eps-surprise | Verisk Analytics, Inc. Quote

Other Stocks to Consider

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

S&P Global (SPGI - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #2.  The company is slated to report results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Clean Harbors (CLH - Free Report) has an Earnings ESP of +3.23% and a Zacks Rank #3. The company is slated to report results on Jul 31.

Green Dot (GDOT - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3. The company is slated to release results on Aug 7.

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