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Verisk (VRSK) to Report Q4 Earnings: What's in the Offing?

Zacks Equity Research

Verisk Analytics, Inc. VRSK is scheduled to report fourth-quarter 2019 results on Feb 18, after the bell.

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.

Shares of Verisk have gained 38% over the past year, compared with the 37.1% growth of the industry it belongs to.

Let’s check out the expectations in detail.

Segmental Growth Likely to Drive Top Line

Strength across all the segments — Insurance, Energy and Specialized Markets, and Financial Services— is likely to have driven Verisk’s fourth-quarter 2019 revenues. The Zacks Consensus Estimate for revenues stands at $669.14 million, indicating growth of 9% from the year-ago reported figure.

The consensus estimate for Insurance segment revenues is pegged at $469 million, indicating growth of 7.6% from the prior-year quarter reported figure. Segment revenues are expected to have benefited from strength in Underwriting & rating and Claims.

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

The consensus mark for Energy and Specialized Markets segment revenues is pegged at $154 million, indicating an increase of 18.5% from the year-ago quarter’s 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 $49.7 million, indicating year-over-year growth of 4.7%. The segment is likely to have benefited from growth in enterprise data management, and fraud and credit risk management solutions.

In third-quarter 2019, total revenues of $652.7 million increased 9% year over year.

Verisk Analytics, Inc. Revenue (TTM)

Verisk Analytics, Inc. Revenue (TTM)

Verisk Analytics, Inc. revenue-ttm | Verisk Analytics, Inc. Quote

Organic Growth & Acquisitions Likely to Drive Bottom Linea

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 fourth-quarter 2019 earnings, the Zacks Consensus Estimate for which is pegged at $1.12 per share, indicating growth of 7.7% from the year-ago quarter reported figure. In third-quarter 2019, adjusted earnings of $1.12 per share increased 3.7% year over year.

What Our Model Says

Our proven Zacks model does not predict an earnings beat for Verisk this season. 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. But that’s not the case here. 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 0.00% and a Zacks Rank #3.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on fourth-quarter 2019 earnings:

Cardlytics CDLX has an Earnings ESP of +8.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Disposal Services ADSW has an Earnings ESP of +35.85% and a Zacks Rank #3.

SailPoint Technologies SAIL has an Earnings ESP of +4.92% and a Zacks Rank #3.

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