Verisk Analytics Inc (VRSK)

Conclusion

Verisk Analytics sells data, analytics and technology to the insurance industry, mainly in the United States. Its offerings cover underwriting, catastrophe modelling, claims and anti-fraud tools. At 200.60 USD on 9 November 2026, the market capitalisation is 25.7 billion USD.

The verdict is fair. Today's P/E of 29.3x compares with a ten-year median of 39.0x, EV/EBITDA of 15.2x with 23.2x, and P/FCF of 23.4x with 34.7x. The DCF gives 160.75 USD per share at a discount rate of 8.9%, while the fair value from historical multiples is 283.90 USD. The fair value band runs from 177.86 to 266.79 USD, with a midpoint of 222.33 USD and a margin of safety of 10.8%. The reverse DCF implies growth of 8.2% a year, against revenue growth of 6.25% and free cash flow per share growth of 11.5% over five years.

What holds the case up: free cash flow conversion of 125.2% over the last twelve months, operating margin of 44.7% against a ten-year median of 40.3%, and eight earnings beats out of eight quarters. What could break it: the current ratio of 1.07, interest coverage of 6.6x, and the DCF resting on a terminal value share of 56.8%. The share price has also fallen from 314.14 USD in May 2025 to 200.60 USD.

Financial health

Financial strength is green, held up by a net cash position with net debt to EBITDA of -0.08 and an Altman Z-score of 6.99, which sits in the safe zone. Interest coverage of 6.6x and a current ratio of 1.07 are neutral, and the quick ratio is 0.95. Debt to equity is not available. The Altman model was designed for manufacturers, so its reading is only a rough guide for a data business. Insolvency risk: medium, about 5.7% by the estimate of the Ohlson model over one to two years. Debt has grown by 1.2% a year over five years, below the 6.25% revenue CAGR.

Earnings quality

Earnings quality is green, supported by strong cash conversion and a falling share count. Free cash flow conversion is 125.2% over the last twelve months and 112.5% over five years, and the accrual ratio is -10.1%, which indicates cash-backed earnings. Stock-based compensation is 1.9% of revenue, leaving 1.04 billion USD of free cash flow after it. The share count has shrunk by 3.4% a year over five years. The Piotroski score is 7 of 9, and the Beneish M-score of -2.94 points to an unlikely risk of manipulation. Eight of eight quarters beat estimates, by 4.2% on average. Estimate revisions are mixed: the current year has five downgrades and one upgrade in the last 30 days, while next year's estimates show 13.0% growth with four upgrades and one downgrade.

Profitability

Profitability is green. Margins are above their ten-year medians: gross margin is 67.7% against 65.2%, operating margin 44.7% against 40.3%, and net margin 27.7% against 28.3%, slightly below. Operating margin has a stability reading of 0.18. Return on invested capital over the last twelve months is not available, because the company reports non-positive invested capital, so the spread against the 8.9% WACC cannot be read. The five-year median ROIC is 28.6%. The DuPont split shows return on equity is inflated by leverage: a net margin of 29.6%, an asset turnover of 0.50 and an equity multiplier of 20.1x, reflecting negative equity.

Growth

Growth is green, with steady revenue and strong per-share cash growth. Revenue compounds at 7.2% over three years, 6.3% over five and 5.7% over ten. Earnings per share compound at 2.8% over three years, 8.7% over five and 8.0% over ten. Free cash flow per share compounds faster, at 20.2% over three years and 11.5% over five. Revenue grew in nine of ten comparable years. The three-year earnings slowdown is the weakest point in this section.

Valuation

Valuation is yellow: the verdict is fair, and the margin of safety of 10.8% is neutral. Today's P/E of 29.3x, EV/EBITDA of 15.2x, P/FCF of 23.4x and P/S of 8.1x all sit well below their ten-year medians, by discounts of 24.9%, 34.5%, 32.5% and 25.9% respectively. The DCF of 160.75 USD assumes a discount rate of 8.9% and terminal growth of 2.5%, and the terminal value accounts for 56.8% of it. The fair value from historical multiples is 283.90 USD, a different figure. The fair value band of 177.86 to 266.79 USD is built on fixed assumptions, including a 5% equity risk premium, and is not a price target. The reverse DCF implies 8.2% growth, above the 6.25% five-year revenue CAGR. The dividend yield is 1.0%, with a payout of 23.4% of free cash flow.

Risks

A current ratio of 1.07 and a quick ratio of 0.95 leave little liquidity cushion if receivables or payables move against the company. Interest coverage of 6.6x would narrow if earnings fell or borrowing rose. Negative equity and an equity multiplier of 20.1x mean small changes in asset values or earnings could move the return on equity sharply. The three-year EPS growth of 2.8% and current-year downgrades show near-term earnings pressure. The DCF relies on a terminal value share of 56.8%, so it is sensitive to the discount rate and terminal growth. Not available: return on invested capital over the last twelve months, debt to equity and the current price-to-book multiple. This analysis has no debt maturity schedule and no revenue split by segment, so it cannot judge refinancing risk or which business lines drive growth.