Why Is Verisk Analytics Stock Trading Lower Today?

Verisk Analytics, Inc. VRSK shares are trading lower after it reported fourth-quarter FY23 earnings results.

Revenues rose 7.4% Y/Y and 6.0% Y/Y on an organic constant currency (OCC) basis to $677.2 million, beating the consensus of $672.2 million.

Revenue benefitted from strong growth in underwriting and more moderate growth in claims.

Underwriting revenues grew 7.8% Y/Y and 7.3% Y/Y on an OCC basis to $479.0 million, aided by solid growth across forms, rules, and loss costs, underwriting data and analytic solutions, extreme event solutions, and life insurance solutions.

Claims revenue grew 6.6% Y/Y and 2.8% Y/Y on an OCC basis to $198.2 million, aided by anti-fraud, casualty, and international growth.

Adjusted EBITDA increased 9.0% Y/Y and 6.5% Y/Y on an OCC basis to $362.0 million on strong revenue growth and cost discipline.

Adjusted EPS fell 2.1% Y/Y to $1.40, missing the consensus of $1.44.

Operating cash flow stood at $252.4 million (up 1.4% Y/Y), and free cash flow was $196.1 million (up 15.8% Y/Y).

Repurchase: The company bought back $250 million in shares in the quarter and had $641.5 million remaining under its share repurchase authorization as of December 31, 2023.

On February 14, the Board of Directors approved an additional share repurchase authorization of $1.0 billion.

Dividend: The company paid a cash dividend per share of $0.34 in the quarter. On February 14, 2024, the company’s Board of Directors approved a cash dividend per share increase of 15% to $0.39, payable on March 29, 2024, to shareholders of record as of March 15, 2024.

FY24 Outlook: Verisk issued FY24 guidance, expecting revenue of $2.840 billion-$2.900 billion vs. consensus of $2.87 billion and adj. EPS of $6.30-$6.60 vs. $6.61 estimate.

Price Action: VRSK shares are down 4.99% at $236.10 on the last check Wednesday.