Profitability analysis

Verisk ‘s revenues were $2.7 billion, $2.5 billion and $2.46 billion in 2023, 2022 and 2021, respectively.

Verisk ‘s revenues in 2023 were up 8% year-on-year.

Verisk ‘s revenue in 2022 were up 1.6% year-on-year.

The company’s growth in revenues has been very slow in the past two years.

Operating income was $1.13 billion, $1.4 billion and $911 million in 2023, 2022 and 2021, respectively.

Verisk’ s operating profit margin was 41.9%, 56% and 37% for 2023, 2022 and 2021, respectively.

Verisk ‘s net income was $614.4 million, $954 million and $666.3 million in 2023, 2022 and 2021, respectively.

Verisk’ s net profit margin was 22.7%, 38% and 27% in 2023, 2022 and 2021, respectively.

Cash flow analysis

Net cash provided by operating activities was $1.06 billion, $1.06  billion and $1.16 billion in 2023, 2022 and 2021, respectively.

The amount of net cash provided by operating activities has been more than that of net income in the past three years, which indicate that the quality of earnings is high.

 Proceeds from sale of businesses were $3.07 billion and $1.07 billion in 2023 and 2022, respectively.

Repurchases of common stock were $2.76 billion, $1.66 billion and $475 million in 2023, 2022 and 2021, respectively.

Dividends paid were $196.8 million, $195.2 million and $188.2 million in 2023, 2022 and 2021, respectively.

Verisk get a  large stream of money by selling businesses, and then returned shareholders by repurchasing stock and paying dividends to shareholders.

Asset structure analysis

Verisk ‘s total assets were $4.37 billion and $7 billion in 2023 and 2022, respectively.

Verisk ‘s total assets in 2023 was down $2.63 billion for selling businesses.

Verisk disclosed that the company completed numerous acquisitions sine January 1, 2021. 

 Goodwill was $1.76 billion in 2023, accounting for 40% of total assets.  The amount of goodwill results from past acquisitions.

Total current assets were $810 million in 2023, consisting of 18.5% of total assets.

The proportion of non-current assets to total assets was very extremely large.

Liquidity and solvency analysis

Total current liabilities were $771 billion in 2023 ,and the current ratio was 1.05.

Total liabilities were $4 billion in 2023.

The debt ratio was 91.5% in 2023, which is very high.

Net cash provided by operating activities has been stable in the past three years, which could support debt.

Summary

Verisk is not a growth stock, and Verisk’ s growth rate is very slow, which would effect valuation.

 The debt ratio was high.

The only advantage is that Verisk  ‘cash flow has been very stable in the past three years.

Now, Verisk’s stock price is $233.93 per share, which is equivalent to $33.5 billion in market cap.

We reckon that $15 billion in market cap is reasonable price.

Disclaimer: the content is for reference only and does not constitute investment advice.

Introduction

Verisk Analytics Inc. is a leading data, analytics, and technology provider serving clients in the insurance ecosystem. they completed the sale of our Energy business on February 1, 2023. they also divested our specialized markets and financial services businesses in March 2022 and April 2022, respectively.