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Verisk (VRSK) Gains From Mavera Buyout Amid Operational Risks

Verisk Analytics VRSK has had an impressive run over the past year. The stock has gained 21.4%, outperforming the 16.5% rally of the industry it belongs to.

VRSK reported impressive first-quarter 2024 results. Its adjusted earnings (excluding 11 cents from non-recurring items) were $1.6 per share, beating the Zacks Consensus Estimate by 7.2% and increasing 26.4% from the year-ago quarter. Total revenues of $704 million surpassed the consensus estimate marginally and increased 8% year over year on a reported basis and 6.9% on an organic constant currency basis.

Verisk Analytics, Inc. Price and EPS Surprise

 

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

How Is Verisk Doing?

Verisk follows a solid growth strategy that concentrates on organic growth, product development and acquisitions. This strategy has led the company to increase its revenues at a compound annual growth rate of 1% over the past five years. It keeps itself updated with the changing market needs by continuous investments in people, data sets, analytic solutions, technology and complementary businesses. Focus is given to increasing solution penetration with customers, developing proprietary databases and predictive analysis, and expanding into new consumer sectors.

The acquisitions of Mavera and Krug in 2023 played a vital role in Verisk’s growth strategy. Mavera assisted in expanding the company in the European region and provided continuous support toward growth in the global insurance industry. Krug helped VRSK to expand its claims and causality services across Europe.

Verisk's current ratio at the end of first-quarter 2024 was 1.09, higher than the preceding quarter's 1.05 and the year-ago quarter’s 0.89. A current ratio of more than 1 often indicates that the company will easily pay off its short-term obligations.

VRSK’s business model centers on vast amounts of data. As a result, the company is susceptible to operational risks related to security breaches in its facilities, computer networks and databases, resulting in the loss of its credibility and/or customers. The company might have to face contractual and pricing issues with data suppliers if it depends on external sources for data supply. Also, data theft and misuse by third-party contractors might lead to business loss and threaten the company’s fundamental existence.

Zacks Rank & Stocks to Consider

Verisk currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are SPX Technologies, Inc. SPXC and Booz Allen Hamilton BAH.

SPX Technologies currently flaunts a Zacks Rank of 1 (Strong Buy). It has a long-term earnings growth expectation of 18%. You can see the complete list of today’s Zacks #1 Rank stocks here.

SPXC delivered a trailing four-quarter earnings surprise of 13.9%, on average.

Booz Allen Hamilton has a Zacks Rank of 2 (Buy) at present.

BAH has a long-term earnings growth expectation of 14%. It delivered a trailing four-quarter earnings surprise of 12.5%, on average.

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Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report

Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report

SPX Technologies, Inc. (SPXC) : Free Stock Analysis Report

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