Verisk Analytics, Inc. (VRSK): what the price requires
At today's price, Verisk Analytics, Inc. (VRSK) is priced for +4.8% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/VRSK
Headline
| Field | Value |
|---|---|
| Ticker | VRSK |
| Company | Verisk Analytics, Inc. |
| Current price | $193.85/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 16.7% |
| Operating margin today | 44.9% |
| Margin compression implied | -28.2pp |
| Implied growth | 4.8% |
| Multiple paid | 22x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 7.4% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.6pp.
Reconcile: at the x-ray's 9.3% required return this reads ~17.7%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.41σ |
| cohort percentile (of 177 peers) | 39 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple; earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | — | 0 | — |
| Earnings | 2.24x | 3 | expensive |
| Relative | 0.67x | 2 | justifies |
| Growth | — | 0 | — |
Families that justify the price: Relative Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=5)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $172.55 | 1.12x | no | FCF base $1.2B, growth 6% (input: historical growth), terminal g 4.0%, WACC 9.2%, 5yr projection |
| DCF Exit Multiple | Growth | $190.11 | 1.02x | no | Exit EV/EBITDA: 14.0x / 16.0x / 18.0x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $275.67 | 0.70x | yes | P/E 35x (static sector reference · 2026-04), scenarios: 29.4x / 35.0x / 40.6x (bear / base = reference held flat / bull), EV/EBITDA 25x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | — | — | no | — |
| Two-Stage Excess Return | Asset | — | — | no | — |
| Discounted Future Market Cap | Growth | $143.86 | 1.35x | no | Rev $3.1B, growth 6% (input: historical growth; tapered), Terminal P/S: 6.7x / 8.0x / 9.3x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $82.96 | 2.34x | no | Normalized EBIT (5y avg op income, one-time charges added back) $1.35B × (1−24%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | $301.79 | 0.64x | yes | EBITDA $1.63B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $90.99 | 2.13x | yes | FCF $1127.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $86.43 | 2.24x | yes | SBC-adj FCF $1.07B (FCF $1.13B − SBC $0.06B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $12.59 | 15.40x | yes | EPS $6.56 × (8.5 + 2×-3.1%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $183.54 | 1.06x | no | Revenue $3.10B × sector P/S 8.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $70.92 | 2.73x | no | EPS $6.56 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $4.5b |
| Net debt / NOPAT (after-tax) | 4.31x |
| Net debt / operating income (pre-tax) | 3.28x |
| Interest coverage | 8.8x |
| Share count CAGR (buyback) | -4.4% |
| Burning cash | no |
Bullet Takeaways
- Verisk is the dominant data and analytics provider to the property-and-casualty insurance industry, supplying the proprietary datasets, pricing tools and claims systems that insurers build their workflows around. It runs at a 44% operating margin and an adjusted EBITDA margin near 56%, the economics of a near-monopoly data franchise.
- Q1 2026 was steady: revenue up about 4% to $783 million, organic constant-currency growth of 4.7%, subscription revenue up 7%, and EPS up about 5%. Management guides full-year revenue to $3.19 billion to $3.24 billion and is buying back stock aggressively, including a $1.5 billion accelerated repurchase.
- The valuation is undemanding for the quality, which is the point. At $173.83 (as of June 27, 2026) the price embeds only about 2% annual operating growth, and the stock has fallen sharply over the past year on a single fear: that AI commoditizes Verisk's data moat.
Bull Case
The right lens for Verisk is what makes insurance data analytics a uniquely defensible business, and Verisk sits at the center of it. The company is a licensed statistical agent for insurance regulators across all 50 states, and its 10-K describes gathering information on individual properties, vehicles and communities to help clients evaluate, segment and price insurance, with building and repair cost estimation data used widely by repair contractors across the US and Canada. That is not a vendor relationship; it is infrastructure. Insurers build their underwriting rules, rate filings and claims workflows around Verisk's data, and migrating away would mean re-tooling systems, re-training staff and re-filing regulatory documentation, a multi-year ordeal. The moat is reinforced by a network effect: the more carriers contribute data to the pooled databases, the more accurate and valuable the analytics become, which pulls in more carriers.
The economics prove the moat is real and intact. Verisk runs a 44% operating margin and a roughly 56% adjusted EBITDA margin, and its return on invested capital has run nearly 20 percentage points above its cost of capital, the unambiguous signature of durable competitive advantage. Q1 2026 showed the resilience: revenue up about 4% to $783 million, organic constant-currency growth of 4.7% across both underwriting and claims, subscription revenue up 7%, and the EBITDA margin expanding another 60 basis points. A business compounding recurring subscription revenue at high single digits while expanding already-elite margins is doing exactly what a monopoly data asset should.
The valuation is where the opportunity sits, because the price asks for almost nothing. At $173.83 the market pays about 20 times operating income, which implies operating growth of only about 2% a year for five years, a fraction of the mid-single-digit organic growth the company is delivering. The stock has fallen nearly in half over the past year on AI-commoditization fears, and the company is leaning into rather than away from that shift, launching a GenAI Commercial Underwriting Assistant and XactAI claims automation, and running a $1.5 billion accelerated buyback into the weakness. The Street remains constructive, with a buy consensus and an average target well above the current price. The bull case is a regulatory-locked, network-effect data monopoly trading at a price that embeds a near-stall in growth it is not experiencing.
Bear Case
The bear case is moat erosion, and the agent doing the eroding is artificial intelligence, which is precisely why the stock has been cut nearly in half over the past year. The fear is concrete: if generative AI and large language models let insurers analyze risk, spot patterns and generate pricing recommendations using their own data and off-the-shelf models, they may no longer need to pay Verisk's premium for proprietary datasets. The whole edifice of Verisk's pricing power rests on its data being scarce and hard to replicate. If AI makes adequate analytics cheap to build in-house, or if new entrants using cloud architectures offer good-enough alternatives at lower cost, the 44% margins and 56% EBITDA margins that justify the valuation are exactly what gets competed away first. This is not a fringe worry; it is the dominant question hanging over every proprietary-data business.
The financial profile adds leverage to that risk. Verisk carries net debt of about $4.5 billion, more than three times trailing operating income, and it just funded a large buyback partly with new senior notes and a $500 million term loan, raising interest costs into a period of rate uncertainty. Leverage is fine when the recurring revenue is unassailable; it is more dangerous when the durability of that revenue is the central debate. The company flagged higher interest costs as an explicit headwind, alongside weather-related softness in transactional revenue and the operational complexity of governing AI contracts, so the very technology that threatens the moat is also adding cost and complexity to the business today.
There is also a growth-ceiling question the premium multiple cannot ignore. Verisk's core P&C insurance market in the US is mature, and organic growth in the mid-single digits, even at elite margins, is not fast. The price implies only about 2% growth, which sounds like a low bar, but it is a bar set by a market that suspects the growth rate could fade rather than accelerate as AI pressures pricing and the addressable market saturates. If the AI threat proves real over a multi-year horizon, the de-rating already seen is not an overreaction but the early innings of a structural repricing, and a levered, slow-growing data business loses the premium that made it a compounder. The bull and bear here are arguing about the same fact, the durability of the data moat, and the bear simply does not trust that it survives the AI era intact.
Valuation
Verisk's valuation reads as a high-quality franchise priced for a near-stall. At $173.83 the market pays about 20 times company-wide operating income, which under a 7.3% cost of capital and 4% terminal growth solves to operating growth of only about 2.1% a year over five years. That is a strikingly low bar for a business delivering mid-single-digit organic growth with expanding margins, and it tells you the price is discounting a meaningful fade rather than a continuation of the trend.
The X-ray is thin here, with only the earnings-power and relative-multiple families populated, but it is informative: the earnings-power family lands at about twice the price, saying expensive on current earnings, while the relative-multiple family sits below the price, saying reasonable versus peers. The split is characteristic of a quality compounder, not cheap on a static earnings view, but reasonable against comparable data and analytics businesses. The reliability on the solve is reasonable.
The honest synthesis is that the entry price is attractive if the data moat holds and expensive if it does not. The implied 2% growth is well below what the company is currently producing, so unless the AI-commoditization thesis plays out, the price understates the business. The reason it is cheap is not a fundamental stumble, organic growth is positive, margins are expanding, the buyback is large, but a market fear about the long-term durability of proprietary insurance data. The analyst consensus, a buy with an average target roughly 30% above the current price, sides with durability. The conclusion is that this is a rare case where a dominant, regulatory-locked data monopoly trades at a price embedding almost no growth; the return depends not on operational improvement, which is already happening, but on the moat surviving the AI era that the market is worried it will not.
Catalysts
The recurring catalyst is organic subscription growth, which is the proof point on whether the moat is holding. Q1 2026 showed revenue up about 4% to $783 million, organic constant-currency growth of 4.7% across underwriting and claims, subscription revenue up 7%, and the adjusted EBITDA margin expanding to 55.9%. Management guides full-year revenue to $3.19 billion to $3.24 billion and adjusted EBITDA to $1.79 billion to $1.83 billion, so each quarter's subscription growth and margin trajectory is the key signal that demand for Verisk's data is intact.
The defining medium-term catalyst is the AI question, and it cuts both ways. The market fear is that AI commoditizes Verisk's data; the company's answer is to embed AI itself, having launched a GenAI Commercial Underwriting Assistant and XactAI claims automation. Adoption of these tools, and any sign that AI is either eroding or extending the moat, is the catalyst that will ultimately re-rate the stock in one direction or the other. Management also flagged AI contract-governance complexity as a near-term operational headwind to watch.
Capital allocation and rates round out the picture. Verisk initiated a $1.5 billion accelerated share repurchase plus open-market buybacks, partly debt-funded, so the pace of repurchase and the level of interest expense both matter against net debt of about $4.5 billion. Weather-related softness in transactional revenue is a swing factor on the top line. The analyst consensus is a buy with an average target well above the current price, so renewed confidence in the durability of the data moat is what would close that gap.
Peer Cohorts (Per Segment, With Filing Citations)
Insurance (single segment) (reported)
- FDS (FACTSET RESEARCH SYSTEMS INC.)
- (no filing in the citation store)
- CLVT (CLARIVATE PLC)
- (no filing in the citation store)
- VRSN (VERISIGN INC/CA)
- (no filing in the citation store)
- EVTC (EVERTEC, Inc.)
- (no filing in the citation store)
- DOX (AMDOCS LIMITED)
- (no filing in the citation store)
- CSGS (CSG SYSTEMS INTERNATIONAL, INC.)
- (no filing in the citation store)
- JKHY (JACK HENRY & ASSOCIATES, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.