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

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Zacks Equity Research
·4 min read
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Verisk Analytics, Inc. VRSK is scheduled to report third-quarter 2020 results on Nov 04, after market close.

While strength across Insurance, and Energy and Specialized Markets segments is likely to have boosted the company’s top line, the bottom line is likely to have been positively impacted by cost discipline in the business.

Let's check out how things have shaped up for the announcement.

Segmental Growth to Drive the Top Line

Verisk’s revenues are likely to have been driven by strength across Insurance, and Energy and Specialized Markets segments. The Zacks Consensus Estimate for third-quarter 2020 revenues stands at $692.64 million, indicating growth of 6.1% from the year-ago reported figure.

The consensus estimate for Insurance segment revenues is pegged at $491 million, indicating growth of 5.1% from the prior-year reported figure. Within the segment, underwriting and rating revenues are likely to have benefited from rise in prices derived from the continued enhancements of the solutions’ contents within the industry-standard insurance programs, sale of expanded solutions to existing customers in commercial and personal lines, and contributions from catastrophe-modeling services. These increases are likely to have been partially offset by a decrease in certain transactional revenues. Claims revenues might have been weighed down by the injunction ruling against roof-measurement solutions and decline in certain transactional revenues in connection with the COVID-19 pandemic.

The consensus mark for Energy and Specialized Markets segment revenues is pegged at $161 million, indicating 12.6% increase from the year-ago reported figure. The segment is expected to have benefited from the Genscape acquisition, environmental health and safety-service solutions, core research, and weather analytics solutions. These may have been partially offset by declines in cost-intelligence solutions' implementation projects, which did not reoccur, and consulting revenues in connection with the COVID-19 pandemic.

The consensus estimate for Financial Services segment revenues is pegged at $41.86 million, indicating year-over-year decline of 3.5%. Impact of the COVID-19 pandemic and the recent dispositions might have weighed on segmental revenues.

Organic Growth to Drive Bottom Line

Verisk’s bottom line is likely to have benefited from cost discipline in the business and lower share count. The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $1.21 per share, indicating growth of 8% from the year-ago quarter’s reported figure.

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 +4.56% and a Zacks Rank #3.

Verisk Analytics, Inc. Price and EPS Surprise

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 too these have the right combination of elements to beat on third-quarter 2020 earnings.

Aptiv APTV has an Earnings ESP of +11.02% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Waste Connections WCN has an Earnings ESP of +3.31% and a Zacks Rank #3.

CoreLogic CLGX has an Earnings ESP of +1.42% and a Zacks Rank #3.

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CoreLogic, Inc. (CLGX) : Free Stock Analysis Report
 
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