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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Verisk Analytics, Inc. (XNAS:VRSK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VRSK
Name:
VERISK ANALYTICS, INC. (XNAS:VRSK)
Sector:
339.60M
Industry:
Consulting Services
CEO:
Mr. Scott Stephenson
Total Employees:
9,367
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -99.88% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VERISK ANALYTICS, INC.(VRSK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CONSULTING SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
184.77
One Month Price Target:
$185.64
Six Month Price Target :
$189.98
Likely Price in One Year's Time:
Ticker:
$195.2
Likely Trading Range Today Under (Normal Volatility)
$184.27
Price Upper limit ($) :
$185.46
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$177.68
This week:
$168.91
This month :
$153.06
Other Primary facts
Market Cap:
29.30B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
156.96M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.29%
-10.68%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$217.66
$202.50
$151.88
$167.04
Medium risk (<10%) entry points
Buy Call
Sell Call
$197.56
Buy Put:
Sell Put:
$194.32
$171.94
$175.22
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VRSK
Sharpe Ratio:
2.25%
Comparison:
VRSK, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 4.37% higher than the industry
& is -1.28% lower than the market/S&P 500 average
Average Returns/Yield of
VRSK
Daily returns:
0.05%
Weekly returns:
0.26%
Monthly returns:
1.03%
Yearly returns:
14.72%
Comparison of returns:
Average annual returns/yield (last 3 years) is -16.11% below industry average
Classification:
VRSK, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.86
Statistical test of Returns:
VRSK has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.89%
Weekly Volatility:
4.23%
Monthly Volatility:
8.47%
Yearly Volatility:
29.34%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.29%
Volatility in last five trading days has been -31.90% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.84%
Weekly VaR:
-8.58%
Monthly VaR:
-17.16%
How Much Can the price of
VRSK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-59.45%
This translates to price declining to:
$157.82
This translates to price declining to:
$74.92
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
VRSK is a 21.14% riskier investment compared to the market/S&P 500 & is 3.78% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -22.78% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VRSK
Beta in relation to market/S&P 500--0.84
Expected beta in 1 year's time:
0.782
Expected beta in 3 year's time:
1.106
Unlevered (debt free) Beta:
0.475
Beta in relation to Nasdaq (XNAS):
0.726
Beta in relation to all global stocks::
0.755
Beta Comparison & Analysis
Beta of competitors/peers::
1.131
Beta is -25.78% lower than peers
Average Industry Beta:
0.889
Beta is -5.56% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
18.42%
Sustainable growth rate is 16.11% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.034
Alpha is -37.08% below industry average alpha yield
Alpha is 220% higher than market/& is unsustainably high
Analysis of Cost of Capital of
VRSK
Equity cost of capital:
0.089
Equity cost of capital is -3.67% below industry mean WACC
Unlevered (without debt) cost of capital:
5.04%
Before-tax cost of debt:
3.14%
After-tax cost of debt:
2.48%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.48%
WACC is -10.27% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$19.42
Revenue growth rate per share of (3Y):
10.84
Annual revenue growth rate is 28.15% above the industry average
EPS:
$6.18
Expected Annual growth rate of EPS (3Y):
14.05%
Expected future EPS growth rate is 39.58% higher than the Consulting Services industry
Free cash flow (FCF) per share:
$5.15
-
-
Debt per share
$16.45
EBITDA per share
$11.32
Valuation Analysis Today of
VRSK
P/E Ratio:
28.51
P/E Ratio of Competitors/Peers:
29.62
P/E ratio is -3.72% lower than main peers & is 47.52% higher than the industry
Stock price/value with industry average P/E ratio: $119.45
VRSK is 54.69% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $36.19
Present value of the expected future dividends only: $18.39
P/S (Price to Sales ratio):
9.51
Price to sales ratio is 177.90% above the industry mean
P/B (Price to book value ratio):
10.84
Price to free cash flow: 35.91
-
Net income growth rate (3Y):
12.80%
Net income growth rate is -87.72% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 4.92%
Dividend yeild: 0.65%
Previous Dividend: $0.31
Previous adjusted dividend: $0.31
Previous Dividend: $1.20
Expected next dividend best case: $0.33
Expected next dividend worst case: $0.29
Average dividend payment (long-term): $0.28
Average dividend increase/decrease (growth rate) % per period: 2.23%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$0.31
2021-12-14--$0.29
2021-06-14--$0.29
2022-03-14--$0.31
2021-09-14--$0.29
2021-03-12--$0.29
Dividend growth rate is -65.73% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
97.10%
Net debt to equity ratio:
132.24%
Debt to assets ratio:
31.64%
Net debt to assets ratio:
43.09%
Debt-to-asset ratio is -45.58% below industry average
Ability to repay debt:
Interest coverage ratio:
14.45
Interest coverage ratio is -24.38% less than industry average
Looking forward:
Debt growth rate:
238.33%
Annual debt growth is 901% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.743
Statistical significance of correlation:
VRSK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.51
Stock price is 45.64% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.51
Correlation of price movement with Nasdaq (^IXIC):
0.001
Covariance of price movement with the market:
0.001
Kurtosis
9.803
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.2
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
VRSK
Gross Profit Margin Ratio:
259%
Operating Profit Margin Ratio:
45.69%
Operating profit margin is 302.41% higher than the industry
Net Profit Margin Ratio:
259%
Effective Tax Rate:
20.91%
Effective tax rate is 6.00% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
37.74%
Return on equity (ROE) is 82.49% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
12.30%
Return on assets (ROA) is 66.62% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
0.47
Current ratio is -71.77% below industry average
Cash Conversion Cycle (days):
54.3
Cash conversion cycle is 162.21% above industry average
The remaining useful life of property plant & equipment is: 1.9 years
Stock based compensation to net income ratio:
2.04%
In-depth Efficiency Analysis
Revenue generated per employee:
325.4K
Each employee generates 0% less revenue than industry average revenue per employee
EBITDA generated per employee:
189.6K
Each employee generates 130% more EBITDA than industry average revenue per employee
Profit generated per employee:
107.1K
Each employee generates 126% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
36.3K
Each employee generates -507% less free cash flow than industry average revenue per employee
Assets/Capital per employee
751.5K
Each employee generates -507% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
VRSK
PACCAR INC (XNAS:PCAR)
COPART, INC. (XNAS:CPRT)
Fastenal Company (XNAS:FAST)
RYANAIR HOLDINGS PUBLIC LIMITED COMPANY (XNAS:RYAAY)
CINTAS CORPORATION (XNAS:CTAS)
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC (XNAS:EXPD)
J. B. HUNT TRANSPORT SERVICES, INC. (XNAS:JBHT)
PAYCHEX, INC. (XNAS:PAYX)
BNGOW
Current Analyst Ratings
Strong buy�17%
Buy�21%
Hold�42%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.05B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.08B
1.97B
-
-
438.20M
-
7.20M
445.40M
-
122.90M
384.30M
1.78B
1.39B
1.00B
1.27B
265.50M
1.00B
Statement of Cash Flow
Date:
Period:
94.20M
Differed Income Tax :
- 37100.00K
Stock Based Compensation :
20.50M
Change in Working Capital :
191.30M
Accounts Receivables:
- 133100.00K
Other Working Capital:
397.10M
Other Non-Cash Items:
- 375100.00K
Net Cash Provided by Operating Activities:
399.60M
Investments in PP&E:
-
Net Acquisitions:
- 488700.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
397.90M
-
397.90M
528.30M
-
193.20M
1.12B
867.80M
3.96B
1.28B
-
5.00M
929.10M
7.04B
-
8.16B
251.20M
1.33B
93.90M
707.00M
114.20M
2.40B
2.58B
62.10M
3.08B
-
5.48B
100.00K
5.70B
- 465000.0K
-
March 31, 2022 at 6:00:00 AM
1.52B
2.66B
8.14B
-
3.91B
3.5B
-
515.00M
26.30M
-
-
- 571300.00K
- 49400.00K
327.10M
- 293600.00K
- 6600.00K
125.70M
406.00M
280.30M
399.60M
- 60000.00K
339.60M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
VRSK
2023
2024
2025
2026
2027
$224.43
$237.09
$250.47
$264.61
$279.54