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How Do Analysts See Verisk Analytics, Inc. (NASDAQ:VRSK) Performing Over The Next Few Years?

Simply Wall St

Verisk Analytics, Inc.'s (NASDAQ:VRSK) released its most recent earnings update in December 2018, which suggested that the company experienced a small tailwind, leading to a single-digit earnings growth of 7.9%. Below is a brief commentary on my key takeaways on how market analysts perceive Verisk Analytics's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

See our latest analysis for Verisk Analytics

Market analysts' prospects for next year seems rather subdued, with earnings increasing by a single digit 5.3%. The growth outlook in the following year seems much more positive with rates generating double digit 18% compared to today’s earnings, and finally hitting US$747m by 2022.

NasdaqGS:VRSK Past and Future Earnings, April 22nd 2019

While it is informative knowing the rate of growth year by year relative to today’s figure, it may be more insightful to determine the rate at which the earnings are rising or falling every year, on average. The advantage of this technique is that we can get a better picture of the direction of Verisk Analytics's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 7.8%. This means, we can presume Verisk Analytics will grow its earnings by 7.8% every year for the next couple of years.

Next Steps:

For Verisk Analytics, I've compiled three essential factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is VRSK worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether VRSK is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of VRSK? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.