The Bull Rankings scorecard — our quality-growth score is 72.5 / 100, built from three pillars scored 0–100: Quality 86, Growth 71, Value 63 (valuation is judged against sector peers). At today's price, our reverse-DCF read says the market is implicitly betting on free-cash-flow growth of about 4% a year next year, fading to 3% a year by year ten — a gauge of how much optimism is already in the stock.
The thesis
Verisk Analytics is a high‑quality growth play that the market is already pricing at a modest premium. Our model gives it a quality‑growth score of 72.5/100, with Quality 86 topping the chart and Value 63 trailing. The high quality score reflects a 29.3% profit margin and a free‑cash‑flow of $1.1 b in the trailing twelve months, while the weaker value pillar signals that the current price already incorporates a fair share of upside. The price of $176.2 sits 27.1× TTM P/E, and the analyst consensus of $234.76 a year out suggests the market expects a ~33% upside. In the quarter ended 2026‑03‑31, revenue grew 5.9% YoY, a modest but steady pace that aligns with the 4%/yr free‑cash‑flow growth implied by our reverse‑DCF. In short, the case for the stock rests on an intact quality moat, sustainable growth, and a valuation that already reflects a reasonable upside.
What the business actually is
Verisk sells data analytics and technology solutions to the insurance sector worldwide. Its core offerings include underwriting solutions—forms, rules, and loss‑cost services that supply policy language, prospective loss costs, and rating rules—alongside underwriting data and analytics solutions that deliver property and auto rating and underwriting information. The company also provides catastrophe modeling and risk solutions, and life‑insurance solutions that modernise underwriting workflows. These segments feed a recurring revenue stream from insurers that rely on Verisk’s data to price risk accurately and efficiently.
Why it can (or can't) keep compounding
The durability of Verisk’s business hinges on three pillars: data exclusivity, scale, and integration. First, the company’s underwriting solutions are embedded in insurers’ policy‑writing engines; switching costs are high because the data feeds are proprietary and tightly coupled to existing workflows. Second, Verisk’s scale is evident in its $23.1 b market cap and $176.2 share price, which support a $1.1 b free‑cash‑flow that can be reinvested or returned to shareholders. Third, the firm’s “Buying back stock” signal shows management confidence in its capital allocation, while the “Raising its dividend” signal indicates a commitment to returning value. These signals reinforce a moat that competitors—who lack the same depth of data and integration—cannot replicate quickly. The 29.3% profit margin further demonstrates that the business can maintain healthy returns even as it scales.
The valuation question
The market’s current price implies a 4%/yr free‑cash‑flow growth (in year one, slowing to 3% a year by year ten), as derived from our reverse‑DCF. Compared to the 5.9% revenue growth in the latest fiscal year, the implied growth is slightly conservative, suggesting that the market expects a modest slowdown. The 27.1× TTM P/E sits near the sector median, yet the PEG ratio of 1.51 indicates that earnings growth is already factored into the valuation. The analyst consensus target of $234.76 represents a ~33% upside from today’s price, which aligns with the modest growth premium implied by the reverse‑DCF. In essence, the stock is not over‑valued; it is priced with a realistic expectation of continued, albeit moderate, growth.
The bear case
The most compelling risk is valuation: the Value pillar (63) is the softest of the three. If Verisk’s free‑cash‑flow growth stalls below the 4%/yr implied by the reverse‑DCF, the price will be forced down. A concrete trigger would be a drop in the 29.3% profit margin or a decline in free‑cash‑flow below $1.1 b. Such a shift would erode the quality advantage and push the stock toward its lower end of the analyst target range. Additionally, the “Diluting shareholders” signal—if it appears—would signal a potential capital structure weakness that could undermine investor confidence.
What would change our mind
- Profit margin falls below 25%: A sustained dip would signal erosion of the cost advantage that underpins the high quality score.
- Free‑cash‑flow drops below $1.0 b: This would invalidate the reverse‑DCF’s growth assumption and suggest the company cannot sustain its dividend and buyback policy.
- Value pillar drops below 55: A significant slide would mean the price has become richer relative to peers.
If any of these conditions materialize, the thesis would shift toward caution.