ONE LEVEL DEEPER
VRSKVerisk Analytics, Inc.
IndustrialsConsulting Services
Analysis generated March 2026 · Data through Dec 2025

With 6.6% revenue growth trading at 39.4x earnings, this boring insurance data utility costs six times what Lynch would pay for each point of growth.

Lynch framework
Leaning Bullish

Implied growth of 2.43% versus trailing 6.6% shows the market already expects the deceleration this framework predicts.

Mauboussin framework
Leaning Bearish
1
THE BUSINESS MODEL

What does this company do and how does it make money?

Insurance focus: 100% of revenue from insurance industry data and analytics services
Subscription model: 84% of revenue from recurring subscriptions, 16% from transactional services
Geographic concentration: 82.1% of revenue from United States, 8.1% from United Kingdom
Revenue growth: 6.6% TTM growth reaching $778.8M in Q4'25, an all-time high
Market position: Herfindahl index of 10,000 indicates complete specialization in one vertical

Verisk operates as a pure-play insurance data utility, providing forms, loss costs, catastrophe modeling, and anti-fraud solutions exclusively to carriers. The 84% subscription revenue base creates predictable cash flows, while complete industry focus drives both specialization benefits and concentration risk.

Revenue by Segment
2
WHAT THE LEGENDS SEE

Five legendary investment frameworks analyzed this company.

Lynch sees a boring stalwart trading at growth multiples while Buffett spots a data utility destroying value with each revenue dollar — but the real story is why management bought 121,902 shares during a 42.4% crash. Tap any framework below to explore their complete analysis and investment position.

Peter Lynch framework
The Everyday Edge
Leaning Bullish
Howard Marks framework
The Cycle Whisperer
Neutral
Warren Buffett framework
The Owner-Operator
Neutral
Benjamin Graham framework
The Value Architect
Leaning Bearish
Michael Mauboussin framework
The Expectations Engineer
Leaning Bearish
3
FOLLOW THE MONEY

How much cash does it generate and where does it go?

Free cash flow: $1.19 billion TTM with 0.89% FCF yield in Q4'25
Capital returns: $624M in buybacks plus $251M in dividends over trailing four quarters
Capital efficiency: 7.9% of revenue spent on capex, indicating asset-light model
Stock compensation: 1.59% of revenue in Q4'25, modest dilution for a tech-enabled business
Buyback effectiveness: -28.9% return on $6.6B spent at average price of $260.46 vs current $185.08

The company generates substantial free cash flow but allocates it poorly, with buybacks underwater by nearly 30%. Management returns 65% of operating cash flow to shareholders while maintaining disciplined capex, though the timing of repurchases has destroyed significant value.

Capital Allocation
4
CHECK THE TREND

Is the business getting stronger or weaker?

Gross margins: Declined to 10-year low of 59.6% in Q4'25 from 77.7% peak in Q4'16
Operating margins: Remained stable at 43.6% in Q4'25 vs 43.0% in Q4'24
Operating leverage: -0.80 coefficient in Q4'25, meaning revenue growth destroys operating income
ROIC trajectory: Peaked at 6.95% in Q2'25 before declining to 5.03% by Q4'25
Revenue momentum: 1.4% growth in Q4'25, decelerating from 6.6% TTM pace

The business shows clear deterioration beneath the revenue line, with gross margins in structural decline and negative operating leverage emerging. While management maintains operating margins through cost control, the fundamental pricing power appears compromised as growth now comes at the expense of profitability.

Gross Margin
5
KNOW THE RISKS

What could go wrong and has it survived trouble before?

Concentration risk: 100% revenue from insurance industry, 82.1% from US market
Earnings volatility: Q1'23 saw EPS crash 84% to $0.37 from typical $1.50+ range
Drawdown severity: Stock fell 47.3% from June 2025 peak of $321.33 to February 2026 trough
Insider conviction: Management bought 121,902 net shares during the 42.4% decline
Recovery profile: Takes 1 quarter to recover from most shocks except 2022 rate shock (10 quarters)

The company demonstrates resilience through crises but remains vulnerable to industry-specific shocks given complete insurance concentration. Management's aggressive buying during the current drawdown signals either deep value recognition or misplaced confidence in a structurally challenged business.

Insider Net Buying/Selling
INSTITUTIONAL FLOW
Capital International Investors added $8.8B
ACCUMULATING8/10 long-term · avg 48 qtrs
137new886existing1,023holders+18 net904staying119exited
Latest 13F filings · 2025-12-31 · 91.8% institutional ownership
INTERACTIVE
How would Verisk Analytics, Inc.'s worst drawdowns feel?
INVESTED
$10,000
BOTTOM
$8,880
$1,120 lost. Recovery: 68 days.

A 0.63% earnings yield against a 4.33% treasury yield isn't a margin of safety — it's a margin of faith in perpetual growth.

6
CHECK THE PRICE

Is the stock priced for perfection, fair value, or pessimism?

Valuation multiples: Trading at 39.4x earnings with 0.63% earnings yield vs 4.33% treasuries
Market expectations: DCF implies only 2.43% perpetual growth vs 6.6% trailing growth
Analyst consensus: Price targets range $223-$260 with median $230 vs current $185.08
Earnings asymmetry: Double beats generate 2.08% gains while double misses trigger -6.51% selloffs
EV/EBITDA: 81.17x, placing it at 35th percentile of 10-year range

Despite trading 34.9% below its DCF value, the stock carries a growth multiple that seems unjustified given negative operating leverage and deteriorating margins. The market's asymmetric reaction to earnings shows it remains priced for perfection even after a 42% decline.

Expectations Gap: DCF vs Market
DCF FAIR VALUE
$284
35% discount
MARKET PRICE
$185
Price implies 2.4% growth · Trailing: 6.6%
INTERACTIVE
Earnings Surprise Roulette
What type of surprise moves the stock most? Tap to find out.

Analysis applies published investment frameworks to publicly available financial data. Educational purposes only. Not financial advice.

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