Stock Analysis & Valuation Verisk Analytics, Inc. (0LP3.L)

• Previous Close: £214.25
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	130.70	-39
Intrinsic value (DCF)	140.27	-35
Graham-Dodd Method		n/a
Graham Formula	78.00	-64

Strategic Investment Analysis

Company Overview

Verisk Analytics, Inc. (LSE: 0LP3.L) is a leading global data analytics provider specializing in predictive analytics and decision support solutions across insurance, energy, financial services, and specialized markets. Headquartered in Jersey City, New Jersey, Verisk leverages advanced machine learning and AI-driven models to help clients assess risk, detect fraud, and optimize business strategies. The company operates through three key segments: Insurance, Energy and Specialized Markets, and Financial Services. Its Insurance segment offers underwriting, claims, and catastrophe risk solutions, while the Energy segment provides analytics for natural resources, renewables, and commodity markets. The Financial Services segment delivers benchmarking and business intelligence for banks, payment processors, and regulators. With a strong market cap of $43.7 billion and a diversified revenue stream, Verisk is a critical player in the data-driven decision-making ecosystem, serving industries where risk assessment and compliance are paramount.

Investment Summary

Verisk Analytics presents a compelling investment case due to its dominant position in data analytics for high-margin industries like insurance and energy. The company's robust revenue ($2.88B) and net income ($958M) reflect strong demand for its predictive analytics solutions. A healthy operating cash flow ($1.14B) and disciplined capital expenditures ($223M) underscore efficient operations. However, its high total debt ($3.25B) and moderate beta (0.898) suggest some financial leverage and market sensitivity. The dividend yield (1.62 per share) adds income appeal, but investors should monitor sector-specific risks, including regulatory changes in insurance and energy markets. Verisk’s AI-driven models and industry expertise provide a competitive moat, making it a long-term growth play in the data analytics space.

Competitive Analysis

Verisk Analytics holds a unique competitive advantage as a vertically integrated data analytics provider, particularly in insurance and energy. Its proprietary datasets, such as ISO claims information and Wood Mackenzie’s energy intelligence, create high switching costs for clients. The company’s AI-powered fraud detection and catastrophe modeling tools are industry standards, giving it pricing power. However, competition is intensifying as SaaS providers like Guidewire and S&P Global expand into analytics. Verisk’s Energy segment competes with Rystad Energy and BloombergNEF in energy research, while its Financial Services segment faces pressure from Fair Isaac Corporation (FICO) in credit scoring. Verisk’s scale and regulatory compliance capabilities differentiate it, but it must continuously innovate to maintain leadership as cloud-native startups disrupt legacy models. Its diversified revenue streams mitigate sector-specific downturns, but reliance on North American insurance markets (~60% of revenue) presents concentration risk.

Major Competitors

• S&P Global Inc. (SPGI): S&P Global is a broader financial data giant with strong positions in credit ratings (S&P Ratings) and commodity analytics (Platts). It competes with Verisk in energy and insurance data but lacks Verisk’s deep underwriting specialization. S&P’s larger scale and diversified revenue are strengths, but its higher debt load post-IHS Markit acquisition poses integration risks.
• Guidewire Software (GWDW): Guidewire focuses on cloud-based P&C insurance software, overlapping with Verisk’s Insurance segment. Its modern architecture appeals to insurers digitizing operations, but it lacks Verisk’s historical claims databases. Guidewire’s recurring revenue model is a strength, but its narrower focus limits cross-selling opportunities compared to Verisk’s multi-sector approach.
• Fair Isaac Corporation (FICO): FICO dominates credit scoring and fraud detection, competing with Verisk’s Financial Services segment. Its FICO Score is industry-standard, but Verisk’s niche in insurance analytics provides differentiation. FICO’s stronger brand in consumer finance is an advantage, while Verisk leads in commercial risk assessment.
• Moody’s Corporation (MCO): Moody’s competes in risk analytics and ESG data but is more concentrated in credit ratings. Its KMV model competes with Verisk’s financial risk tools, though Verisk has deeper insurance expertise. Moody’s global footprint is a strength, but it lacks Verisk’s energy and natural resources verticals.
• Thomson Reuters Corporation (TRI): Thomson Reuters offers legal and regulatory analytics, overlapping with Verisk’s compliance solutions. Its Refinitiv division competes in financial data but is less specialized in insurance. Thomson’s strong cash flow is a plus, but Verisk’s industry-specific algorithms provide more tailored insights for risk management.