U.S. Markets open in 2 hrs 50 mins

Is a Beat in the Cards for Verisk (VRSK) in Q3 Earnings?

Zacks Equity Research

Verisk Analytics, Inc. VRSK is scheduled to report third-quarter 2019 results on Oct 29, after market close.

While the company’s top line is likely to have gained from solid segmental performance, the bottom line is expected to have performed well on the back of organic growth and contribution from acquisitions.

So far this year, shares of Verisk have gained 36.3% compared with the 36.9% rise of the industry it belongs to and 18.3% increase of the Zacks S&P 500 composite.

 

Let’s check out the expectations in detail.

Segmental Growth to Drive Top Line

Strength across all the segments — Insurance, Energy and Specialized Markets, and Financial Services— is likely to have driven Verisk’s third-quarter 2019 revenues. The Zacks Consensus Estimate for revenues stands at $649.59 million, indicating growth of 8.5% from the year-ago reported figure. In second-quarter 2019, total revenues of $652.6 million increased 8.5% year over year.

Segment-wise, the consensus estimate for Insurance segment revenues is pegged at $468 million, indicating growth of 9.3% from the prior-year quarter reported figure. Segment revenues are expected to have benefited from strength in two units — Underwriting & rating and Claims.

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

The consensus mark for Energy and Specialized Markets segment revenues is pegged at $138 million, indicating a 7.8% increase from the year-ago reported figure. Revenues from market and cost intelligence solutions and core research are expected to have aided the segment. 

The consensus estimate for Financial Services segment revenues is pegged at $46.81 million, indicating year-over-year growth of 8.1%. The segment is likely to have benefited from solid growth in spend-informed analytics and portfolio management.

Organic Growth & Acquisitions to Drive Bottom Line

Solid organic growth, contribution from acquisitions and lower share count are likely to have partially offset the headwinds arising from higher depreciation and amortization expense and higher effective tax rate. This is expected to get reflected in Verisk’s third-quarter 2019 earnings, the Zacks Consensus Estimate for which is pegged at $1.13 per share, indicating growth of 4.6% from the year-ago quarter reported figure. In second-quarter 2019, adjusted earnings of $1.10 per share increased 4.8% year over year.

What Our Model Says

Our proven model predicts an earnings beat for Verisk this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Verisk has an Earnings ESP of +2.22% and a Zacks Rank #3.

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 other stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these too have the right combination of elements to beat on third-quarter 2019 earnings:

S&P Global SPGI has an Earnings ESP of +1.72% and a Zacks Rank #2. The company is slated to report results on Oct 29. You can see the complete list of today’s Zacks #1 Rank stocks here.

WEX Inc. WEX has an Earnings ESP of +1.24% and a Zacks Rank #3. The company is slated to report results on Oct 31.

Fidelity National Information Services, Inc. FIS has an Earnings ESP of +0.13% and a Zacks Rank #3. The company is slated to release results on Nov 5.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
S&P Global Inc. (SPGI) : Free Stock Analysis Report
 
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report
 
WEX Inc. (WEX) : Free Stock Analysis Report
 
Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research