Verisk Analytics
VRSK
$190.90
+1.91%
Verisk Analytics is a data, analytics, and technology provider serving the property-casualty (P&C) insurance industry, supplying underwriting solutions such as forms, rules, loss costs, and catastrophe modeling, alongside claims tools including property repair estimates and antifraud analytics; roughly 83% of revenue is US-based and the firm operates as a single insurance-focused segment. Verisk occupies a quasi-utility position in its niche, functioning as the de facto industry-standard data clearinghouse and regulatory infrastructure layer for US P&C insurers — a position rooted in its origins as the nonprofit Insurance Services Office founded in 1971, which creates high switching costs and a durable moat. The current investor debate is sharply polarized: bears argue that generative AI could commoditize the firm's proprietary data and analytics, a fear that has driven a dramatic de-rating of the shares, while bulls counter that Verisk's regulatory entrenchment, immense proprietary datasets, and strong cash generation make the selloff an attractive long-term entry point. Recent coverage frames the central question explicitly — whether Verisk's valuable data moat holds or AI commoditizes it — and the stock's sharp drawdown despite steady mid-single-digit revenue growth suggests the market is pricing existential risk rather than near-term fundamentals.…
VRSK
Verisk Analytics
$190.90
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Investment Opinion: Should I buy VRSK Today?
Rating: Buy. Verisk offers a compelling risk/reward for long-term investors willing to look past near-term AI fears. The analyst consensus is 'buy' with an average target of $227.94, implying 19.4% upside, and the forward PE of 21.93x is reasonable for a company with a wide moat and 45% operating margins. The core thesis is that Verisk's regulatory entrenchment and proprietary data are not easily replicated, and the market has overpriced the AI threat.
Supporting evidence is strong: revenue grew 4.36% YoY in Q2 2026 with no deceleration, gross margin expanded to 71.05%, and free cash flow is $1.24B TTM. The forward PE of 21.93x is well below the trailing PE of 34.36x and the historical 43.0x, suggesting the stock is cheap relative to its own history. Analyst estimates for EPS of $12.39 and revenue of $4.22B confirm expectations of steady growth. While the PS ratio of 10.12x is rich for a 4.4% grower, the premium is justified by exceptional margins and recurring revenue. The recent 5.03% one-month gain and positive relative strength (+3.81% vs. SPY) indicate improving sentiment.
Risks include the AI commoditization threat, which could invalidate the moat, and the premium valuation that leaves little room for error. The rating would upgrade to Strong Buy if the stock breaks above $213 resistance and AI fears subside, or downgrade to Hold if revenue growth decelerates below 3% or if AI disruption becomes evident in customer churn. On balance, Verisk appears undervalued relative to its history and fairly valued relative to peers, offering a favorable entry point for patient investors.
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VRSK 12-Month Price Forecast
Verisk presents a favorable risk/reward for long-term investors. The company's regulatory moat and proprietary data are difficult to replicate, and the market has priced in excessive AI disruption risk, as evidenced by the 41% max drawdown. Fundamentals remain solid with mid-single-digit growth, expanding margins, and strong cash flow. The forward PE of 21.9x is attractive relative to history, and analyst targets imply significant upside. However, the AI threat is real and unresolved, which caps confidence. I would upgrade to high confidence if the stock breaks above $213 resistance and revenue growth accelerates above 5%, or downgrade to neutral if growth slows below 3% or if AI-driven customer losses emerge.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Verisk Analytics's 12-month outlook, with a consensus price target around $227.94 and implied upside of +19.4% versus the current price.
Average Target
$227.94
0 analysts
Implied Upside
+19.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$195 - $260
Analyst target range
Coverage is broad and constructive, with 17 analysts covering Verisk and a consensus recommendation of "buy" (recommendation mean of 2.05 on a scale where lower is more bullish). The average target price is $227.94, implying roughly +19.4% upside from the current $190.90 — a meaningful gap that suggests the sell-side views the AI-driven de-rating as overdone. Consensus estimates call for EPS of $12.39 (range $12.26-$12.48) on revenue of approximately $4.22 billion, consistent with the forward PE of 21.9x and reinforcing that analysts expect steady, profitable growth rather than disruption. The bullish tilt is notable given the stock's -16.66% 1-year performance, indicating analysts are leaning into the contrarian thesis. The target range is wide — $195.00 at the low to $260.00 at the high — a $65 spread (33% of the average target) that signals genuine disagreement about the AI threat. The high target of $260 implies roughly +36% upside and likely assumes multiple re-expansion back toward historical levels plus confidence that the data moat holds and AI becomes a tailwind rather than a threat; the low target of $195 sits just 2% above the current price, effectively pricing in stagnation or mild multiple compression from AI commoditization fears. Institutional ratings show a recent positive skew: Jefferies upgraded to Buy from Hold on July 23, 2026, Raymond James moved to Strong Buy from Outperform in March, and firms including Barclays, Wells Fargo, JP Morgan, and RBC maintain Overweight/Outperform ratings, while UBS and BofA remain Neutral. The pattern of upgrades and persistent overweight ratings, against a backdrop of a deeply discounted share price, suggests the analyst community sees asymmetric upside — though the wide dispersion and the presence of Neutral ratings indicate the AI debate remains unresolved and conviction is not uniform.
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Bulls vs Bears: VRSK Investment Factors
The bull case rests on Verisk's entrenched regulatory moat, consistent mid-single-digit revenue growth, elite margins, and a forward PE of 21.9x that appears reasonable for a high-quality franchise. The bear case centers on the existential threat of AI commoditization, a premium sales multiple (10.1x) relative to growth, and a leveraged balance sheet after aggressive buybacks. Currently, the evidence slightly favors the bulls: fundamentals show no sign of disruption, analysts are overwhelmingly positive with a $227.94 average target, and the stock has stabilized with a 5.03% one-month gain. However, the single most important tension is whether AI will erode Verisk's data moat—a factor that could either validate the current discount as a buying opportunity or prove the market's de-rating correct. Resolution of this debate will likely determine the stock's trajectory over the next year.
Bullish
- Regulatory moat remains intact: Verisk's origins as the Insurance Services Office (ISO) and its role as the de facto industry-standard data clearinghouse create high switching costs and regulatory entrenchment. With 83% of revenue US-based and a single insurance segment, the company is deeply embedded in P&C insurers' workflows, making displacement by AI unlikely in the near term.
- Steady revenue growth with no deceleration: Q2 2026 revenue grew 4.36% YoY to $806.3 million, continuing a consistent sequential climb from $753.0M in Q1'25. This mid-single-digit growth, with no visible slowdown, directly rebuts the bear case that AI is already disrupting the business.
- Elite margins and strong cash generation: Gross margin expanded to 71.05% in Q2 2026 from 69.35% in Q1'25, while operating margin held at 45.11%. Trailing free cash flow is $1.24 billion with an FCF/OCF conversion rate of ~81%, funding aggressive buybacks ($1.63B in Q1'26 alone).
- Attractive forward valuation: The forward PE of 21.93x is 36% below the trailing PE of 34.36x, implying expected EPS growth to $12.39. This multiple is reasonable for a company with 45% operating margins and a wide moat, especially compared to its historical PE of 43.0x in Q2'25.
Bearish
- AI commoditization threat is existential: Generative AI could potentially replicate or commoditize Verisk's proprietary data and analytics, eroding its moat. The market has priced this risk with a 41.09% max drawdown and a 16.66% 1-year decline, reflecting fears that the business model may be disrupted.
- Premium valuation despite slow growth: At 10.12x sales and 22.87x EV/EBITDA, Verisk trades at a premium to peers while growing revenue only ~4.4%. The PEG ratio is negative, and the PS multiple is rich for a mid-single-digit grower, leaving little room for multiple expansion.
- Leverage and buyback risk: Debt-to-equity of 16.30x (though distorted by buybacks) and a cash balance that fell from $2.18B to $524.5M after aggressive repurchases ($1.63B in Q1'26) reduce financial flexibility. Interest expense jumped to $52.8M in Q2'26 from $35.5M, pressuring net income.
- Earnings quality concerns: Q2 2026 net income of $228.6M was below Q2 2025's $253.3M despite higher revenue, partly due to a tax benefit distortion (income tax expense of -$74.8M). EPS declined to $1.75 from $1.81, highlighting underlying earnings pressure.
VRSK Technical Analysis
Verisk is in a sustained, multi-quarter downtrend that has only recently begun to stabilize. The stock is down -16.66% over the trailing year and -13.63% year-to-date, a stark underperformance versus the S&P 500's +15.53% 1-year and +11.93% YTD returns, producing a punishing -32.19% relative strength reading over 12 months. At the current price of $190.90, the shares sit roughly 40% above the 52-week low of $155.94 but about 20% below the 52-week high of $239.47 — positioning at approximately 42% of the 52-week range, which places it in the lower-middle of its band: not a falling knife at the lows, but far from confirming a momentum breakout. The -41.09% max drawdown underscores how severe the de-rating has been and how much technical damage needs repairing. Short-term momentum, however, has turned constructive and is diverging from the longer-term trend. The stock is up +5.03% over the past month versus a +1.22% gain for SPY, yielding a positive +3.81% relative strength reading over 1 month — a notable reversal from the -7.56% 3-month relative weakness (the stock fell -4.87% over three months while SPY rose +2.69%). The 6-month change of +7.21% roughly matches SPY's +7.48%, suggesting the worst of the selling occurred in the first half of the window and a base is forming. This 1-month-vs-1-year divergence is consistent with either a mean-reversion bounce off oversold conditions or the early stages of a trend reversal; the recent run from the October 5 low of $163.28 to $190.90 (+16.9% in under two weeks) is a powerful thrust that argues for at least a tactical bottom, though it also raises short-term overbought risk. Key technical levels are well defined. Support rests at the 52-week low of $155.94, with a secondary shelf around the recent $163-$168 congestion zone; a breakdown below $155.94 would signal the market is re-pricing the AI-disruption thesis into the fundamentals and open further downside. Resistance sits at the 52-week high of $239.47, with intermediate supply likely near the $200-$213 area where the stock repeatedly failed in July and August. A decisive breakout above $213 would confirm a trend change, while failure there would mark the rally as a countertrend bounce. With a beta of just 0.692, Verisk is roughly 31% less volatile than the market — a defensive characteristic that historically supported premium multiples but has not insulated it from this idiosyncratic de-rating, meaning position sizing should account for stock-specific (not market) risk.
Beta
0.69
0.69x market volatility
Max Drawdown
-38.5%
Largest decline past year
52-Week Range
$156-$239
Price range past year
Annual Return
-16.7%
Cumulative gain past year
| Period | VRSK Return | S&P 500 |
|---|---|---|
| 1m | +5.0% | +0.2% |
| 3m | -4.9% | +2.9% |
| 6m | +7.2% | +8.4% |
| 1y | -16.7% | +14.9% |
| ytd | -13.6% | +11.9% |
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VRSK Fundamental Analysis
Verisk's revenue trajectory is steady but modest, showing no sign of the collapse implied by the share price. Q2 2026 revenue came in at $806.3 million, up +4.36% year-over-year from $772.6 million in Q2 2025, and the multi-quarter progression — $753.0M (Q1'25), $772.6M (Q2'25), $768.3M (Q3'25), $778.8M (Q4'25), $782.6M (Q1'26), $806.3M (Q2'26) — reveals a consistent, gently accelerating sequential climb with growth holding in the mid-single digits. The single Insurance segment ($569.1M disclosed) remains the sole growth engine, and the absence of segment drag means the top line is a clean read on core P&C subscription demand. For a company whose stock has fallen roughly 50% from prior highs on AI fears, +4.4% organic growth with no visible deceleration is the key fundamental rebuttal to the bear case — though it also means the company is not growing fast enough to simply outrun multiple compression. Profitability is robust and margins are expanding. Q2 2026 net income was $228.6 million on a 28.35% net margin, with gross margin of 71.05% and operating margin of 45.11% — elite software-like economics. Gross margin has trended up from 69.35% in Q1'25 to 71.05% in Q2'26, and operating margin has held in the 43.6%-45.8% band across the last several quarters, with Q2'26's 45.11% near the top of that range. Notably, Q2'26 net income of $228.6M was below Q2'25's $253.3M despite higher revenue, reflecting a jump in interest expense to $52.8M from $35.5M and a tax benefit distortion (income tax expense of -$74.8M), so the headline EPS comparison ($1.75 vs. $1.81) understates underlying operating strength. The balance sheet and cash generation are strong, though leverage warrants monitoring. Trailing free cash flow is $1.24 billion, with quarterly FCF of $297.9M in Q2'26 and $326.4M in Q1'26, and operating cash flow of $366.0M and $390.4M respectively — cash conversion is excellent, with FCF/OCF at roughly 81%. The company returned substantial capital, repurchasing $1.63 billion of stock in Q1'26 alone and $200.1M in Q2'26, funded partly by drawing on a cash balance that fell from $2.18B to $524.5M. Debt-to-equity of 16.30x looks alarming but is an artifact of a heavily buyback-shrunk equity base (book value is near zero, hence the 100.7x P/B); interest coverage of roughly 6.9x and a current ratio of 1.20 indicate adequate liquidity. ROE of 293.9% and ROA of 18.96% are distorted by the thin equity base but confirm high returns on capital; the aggressive buyback is a double-edged sword — accretive to EPS but it leaves less balance-sheet cushion if AI disruption pressures cash flows.
Quarterly Revenue
$806300000.0B
2026-06
Revenue YoY Growth
+4.4%
YoY Comparison
Gross Margin
71.0%
Latest Quarter
Free Cash Flow
$1.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is VRSK Overvalued?
Because Verisk is solidly profitable (Q2 2026 net income of $228.6M; trailing net margin 29.56%), the PE ratio is the appropriate primary metric. The stock trades at a trailing PE of 34.36x versus a forward PE of 21.93x — a 36% compression that implies the market expects meaningful EPS growth, consistent with consensus estimated EPS of $12.39 versus the trailing figure. That forward multiple of ~21.9x is far more reasonable than the trailing headline and is the more relevant anchor for a mid-single-digit grower with 45% operating margins. On a peer basis, Verisk screens expensive on most multiples: PS of 10.12x, EV/Sales of 9.07x, EV/EBITDA of 22.87x, and P/FCF of 21.66x. Against a software-services sector where high-teens-to-low-20s EV/EBITDA is typical, Verisk's 22.87x represents a modest premium, while its 10.1x sales multiple is rich for a company growing revenue only ~4.4% — the premium is justified by exceptional margins (71% gross, 45% operating) and the regulatory moat, but the growth rate does not support much multiple expansion. The PEG ratio of -10.07 is not meaningful given negative/erratic earnings growth inputs and should be disregarded. Historically, Verisk's valuation has compressed dramatically: its trailing PE was 43.0x in Q2'25, 39.4x in Q4'25, and 27.4x in Q1'26, versus 34.4x now — meaning the current multiple sits in the lower half of its own recent band and well below the 40x+ levels of a year ago. Similarly, PS has fallen from 56.4x in Q2'25 to 10.1x today, and EV/EBITDA from over 100x (distorted by the pre-buyback capital structure) to 22.9x. This de-rating reflects the market repricing AI risk, and while it creates a more attractive entry point, the stock is not statistically cheap on absolute multiples — it is cheap relative to its own history, which is a weaker signal than absolute undervaluation.
PE
34.4x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 26x~50x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
22.9x
Enterprise Value Multiple
Investment Risk Disclosure
Verisk's financial risks are moderate but noteworthy. The company carries a debt-to-equity ratio of 16.30x, which, while an artifact of a buyback-shrunk equity base, still reflects a leveraged capital structure; interest expense rose to $52.8M in Q2 2026 from $35.5M a year earlier, reducing net income to $228.6M despite higher revenue. Additionally, the aggressive buyback ($1.63B in Q1'26 alone) drained cash from $2.18B to $524.5M, leaving less cushion if cash flows are pressured. However, interest coverage of ~6.9x and a current ratio of 1.20 suggest adequate liquidity, and free cash flow of $1.24B TTM remains robust. The main financial risk is that continued buybacks at high prices could destroy value if the stock fails to recover, and that rising interest costs could further compress earnings. Operationally, revenue concentration in the US P&C insurance market (83% of revenue) and a single segment means limited diversification; a downturn in insurance industry spending or regulatory changes could disproportionately impact results.
Market and competitive risks are significant. The stock's beta of 0.692 indicates lower volatility than the market, but it has not insulated Verisk from an idiosyncratic de-rating driven by AI fears. The valuation remains at a premium: PS of 10.12x and EV/EBITDA of 22.87x are above typical software-services peers, leaving room for multiple compression if growth slows or AI disruption fears intensify. The wide analyst target range ($195-$260) signals disagreement about the AI threat, and any negative news on AI commoditization could trigger another leg down. Additionally, the stock's relative strength has been weak, underperforming the S&P 500 by 32.19% over 12 months, and it faces technical resistance at $200-$213. Sector rotation away from defensive growth names could also weigh on performance.
The worst-case scenario involves AI rapidly commoditizing Verisk's data and analytics, leading to customer attrition, pricing pressure, and a decline in revenue growth. This could cause the stock to retest its 52-week low of $155.94, representing a 18.3% decline from the current price of $190.90. If the AI threat materializes faster than expected, the stock could fall below the 52-week low, with the analyst low target of $195 offering little support (only 2% above current). A more severe outcome, such as a significant loss of market share to AI-native competitors, could drive the stock down to the $140-$150 range, a 21-27% drop. Given the max drawdown of 41.09% over the past year, investors should be prepared for substantial volatility; a worst-case scenario could result in a 30-40% loss from current levels.
FAQ
The most severe risk is AI commoditization, which could erode Verisk's data moat and lead to customer churn; this is reflected in the 41.09% max drawdown. Financial risk includes high leverage (debt-to-equity of 16.30x) and reduced cash balance ($524.5M) after aggressive buybacks, which could limit flexibility if cash flows decline. Competitive risk comes from AI-native startups potentially offering cheaper analytics, though Verisk's regulatory entrenchment provides some protection. Macro risk is lower due to a beta of 0.692, but insurance industry spending could slow in a recession. Company-specific risk includes earnings quality concerns, as Q2 2026 net income fell despite revenue growth due to higher interest expense.
Our 12-month forecast has three scenarios: Bull (30% probability) targets $240-$260, assuming AI fears dissipate and multiple re-rates toward historical levels; Base (50%) targets $215-$240, assuming steady mid-single-digit growth and gradual recovery toward the analyst average of $227.94; Bear (20%) targets $155-$195, assuming AI disruption intensifies and revenue growth slows. The base case is most likely, driven by continued revenue growth of 4-5% and stable margins. Key assumptions include no major customer losses and interest expense stabilizing. The wide target range reflects genuine uncertainty about the AI threat.
VRSK is fairly valued to slightly undervalued relative to its own history but trades at a premium to peers on some metrics. The forward PE of 21.93x is well below the trailing PE of 34.36x and the historical 43.0x, suggesting the market has already priced in significant risk. However, the PS ratio of 10.12x and EV/EBITDA of 22.87x are above typical software-services peers, justified by superior margins. The stock is not statistically cheap on absolute multiples, but the discount to historical levels and the 19.4% upside to analyst targets imply the market expects AI fears to be overdone. Valuation implies the market expects mid-single-digit growth to continue, with potential for multiple expansion if AI concerns ease.
From a risk/reward perspective, VRSK appears attractive for long-term investors. The stock trades at $190.90, 19.4% below the analyst average target of $227.94, and the forward PE of 21.93x is reasonable for a company with 45% operating margins and a wide moat. The biggest downside risk is AI commoditization, which could drive the stock to its 52-week low of $155.94, an 18% decline. However, the steady 4.36% revenue growth and strong cash flow suggest the business is not disrupted. It is a good buy for those with a multi-year horizon who can tolerate volatility, but near-term traders may want to wait for a breakout above $213.
VRSK is best suited for long-term investment, given its wide moat, steady growth, and defensive characteristics (beta of 0.692). The stock's recent volatility and AI-related uncertainty make short-term trading risky, as evidenced by the 41.09% max drawdown. The company pays a modest dividend (yield 0.81%) and has a strong buyback program, supporting a multi-year holding period. Earnings visibility is high due to recurring subscription revenue, but the AI debate could take time to resolve. We recommend a minimum holding period of 2-3 years to allow the market to recognize the durability of the franchise and for AI fears to abate.
