Is Now the Right Moment for Verisk as Shares Trade Near Record Highs in 2025?

If you are eyeing Verisk Analytics at its current price of $247.07, you might be wondering whether now is the right time to hold, buy, or even trim your position. Verisk is one of those analytical powerhouses with a solid history, but its stock performance lately has left investors with mixed emotions. Over the past week, the stock ticked up 1.5%, recouping just a fraction of the ground it lost in recent months. In fact, the past month has been rough for Verisk, down 7.7%, and it has yet to claw its way back in 2024, down 9.6% year-to-date and off 5.9% over the last 12 months. On a brighter note, if you zoom out, the three-year and five-year returns are still impressive, sitting at 47.6% and 40.0%, respectively.

Some recent market shifts have been at play here, with investors parsing broader economic signals and shifting capital among analytics, financials, and technology players. While none of the latest headlines have sent shockwaves through the sector, the under-the-radar moves often paint a more nuanced picture and shape market perceptions about risk and growth potential.

Now, when it comes to valuation, Verisk scores a 1 out of 6 based on common undervaluation checks. This is not exactly a screaming bargain, but not wildly overpriced, either. However, these checks only tell part of the story. Up next, I will discuss how various valuation metrics stack up, and at the end, I will introduce a more insightful way to approach valuation for a company like Verisk.

Verisk Analytics scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Verisk Analytics Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today's dollars. This method gives investors a sense of what the stock should be worth, using reasonable assumptions about its future performance.

For Verisk Analytics, the DCF calculation starts with its latest trailing twelve month Free Cash Flow of $986.6 million. Analysts expect this cash flow to grow in the coming years, reaching $1.22 billion by 2027. After that, projections suggest continued growth, with Free Cash Flow potentially rising to about $1.69 billion by 2035. These further estimates are extrapolated and not based on direct analyst forecasts.

Using these projections, the DCF model estimates the fair value of Verisk's stock at $220.85 per share. Comparing this to the current price of $247.07, the stock trades at an 11.9% premium to its intrinsic value. In other words, according to this approach, Verisk Analytics is a bit overvalued based on future cash flow expectations.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Verisk Analytics.

Our Discounted Cash Flow (DCF) analysis suggests Verisk Analytics may be overvalued by 11.9%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Verisk Analytics Price vs Earnings

The Price-to-Earnings (PE) ratio is one of the most commonly used tools to value established and profitable companies like Verisk Analytics. Since it relates the stock price to the company’s earnings, it helps investors judge how much they are paying for every dollar of current profit. Growth expectations and perceived risks play a major role in setting what counts as a “normal” or “fair” PE ratio. Fast-growing or lower-risk companies can often justify higher PE ratios, while slower-growth or riskier names typically trade for less.

Currently, Verisk trades at a PE ratio of 38x. This is almost exactly in line with the average for its closest peers at 37.8x. It is notably higher than the broader professional services industry average of 26.1x. While this premium may reflect Verisk’s strong market position and steady growth, it is important not to rely solely on these direct comparisons.

This is where Simply Wall St’s proprietary “Fair Ratio” comes into play. The Fair Ratio attempts to factor in not only growth and profitability, but also the company’s risk profile, market cap, and industry characteristics. By considering these deeper metrics, the Fair Ratio provides a more tailored benchmark than simply comparing with peers or the industry. For Verisk, the Fair Ratio is calculated at 29.2x. Relative to Verisk’s actual PE of 38x, the stock looks overvalued based on this more nuanced approach.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Verisk Analytics Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal investment story, connecting what you believe about a company’s future, such as its upcoming revenue growth, profit margins, and risks, to a tailored financial forecast and target fair value. Instead of only looking at numbers or analyst estimates, Narratives let you factor in your own perspective, tying Verisk’s business changes and outlook directly to your investment case.

Narratives are easy to build and adjust, available for free on Simply Wall St’s Community page, where millions of investors post and refine their views. By creating a Narrative, you can see how your story translates into projected earnings, key metrics, and an updated fair value. Importantly, you can compare that against the current share price to help you decide when to buy, hold, or sell. Narratives update in real time as new events or earnings releases roll in, so your assumptions always reflect the latest information.

For example, on Verisk Analytics, some investors see a fair value as high as $340 if they expect rapid platform adoption and margin expansion, while others land closer to $258 based on more cautious industry growth or economic risks.

Do you think there's more to the story for Verisk Analytics? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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