Shares of Verisk Analytics, Inc. VRSK have gained 10.9% over the past year.
Let’s delve deeper into the factors that have contributed to the company’s price performance.
Consecutive Revenue Beat
Verisk reported better-than-expected revenues in all the four quarters of 2019 as well as in first-quarter 2020. The uptick came on the back of continued strength in the company’s Insurance segment and improvement in the Energy and Specialized Markets segments.
Higher Organic Revenue Growth
Verisk continues to witness higher organic revenue growth through a combination of an increase in new customers for existing solutions, cross-sale of its existing solutions to customers at present and the sale of new solutions. The company continuously seeks to expand its portfolio by leveraging its deep knowledge and position. It develops new, proprietary data sets and predictive analytics after understanding customers' evolving needs. Notably, Verisk has recorded an average organic revenue growth of about 8% in the past 10 years.In 2019, total revenues grew 6.7% on an organic constant-currency basis, which marks an improvement from 6.1% growth in 2018 and 5.3% in 2017.
Strategic Acquisitions Bode Well
Acquisitions have also been one of the key growth catalysts for Verisk. It has been continuously expanding its global footprint through acquisitions and investments.
In 2019, Verisk completed the following acquisitions. In December, the company acquired FAST to enhance its data and analytics solutions in life insurance and annuities market and selected assets of Commerce Signals to enhance its Financial Services segment. In November, Verisk acquired Genscape to expand its Wood Mackenzie business line’s existing intelligence in energy data and analytics, and strengthen its research and consultancy across the natural resources sectors. In October, the company acquired BuildFax to boost its Insurance segment. In August, the company acquired all of the assets of Property Pres Wizard to enhance its claims category within the Insurance segment. In July, Keystone Aerial Surveys was purchased to expand its remote imagery business.
In March, the company inked a deal with an enterprise application software provider to acquire the latter’s Content as a Service business to strengthen its environmental health and safety services and extend its global customer footprint and European operations.
Zacks Rank and Stocks to Consider
Verisk currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are CoreLogic CLGX, SPS Commerce SPSC and SailPoint Technologies Holdings, Inc. SAIL. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for CoreLogic, SPS Commerce and SailPoint is 12%, 15% and 15%, respectively.
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