Verisk Analytics Outlook - A Technical Downturn Amid Mixed Fundamentals

Market Snapshot

Takeaway: While fundamentals show weak signals and technical indicators are bearish, fund flows remain positive—highlighting a mixed outlook for VRSK.

News Highlights

Recent headlines impacting Verisk Analytics and the broader market include:

• MLB's Investment in Women's Sports: Major League Baseball's strategic investment in the Athletes Unlimited Softball League (AUSL) signals a growing interest in women’s professional sports. This could indirectly affect insurance and risk analytics markets as more attention is paid to athlete safety and data tracking.
• Chase Buchanan Achieves CII International Status: Chase Buchanan Wealth Management’s achievement as the only global expat-focused CII international partner could hint at a broader shift in professional financial services. While not directly related to VRSK, it highlights market growth in specialized financial sectors.
• Med-X Launches Eco-Friendly Pest Control Offering: Med-X Inc.’s $10M Regulation A+ offering for its eco-friendly pest control and pain management solutions may reflect investor appetite for niche, sustainable professional services. However, it doesn’t directly impact VRSK’s core offerings.

Analyst Views & Fundamentals

Currently, only one analyst, Scott Wurtzel of Wolfe Research, is active within the past 20 days, and he gave a Buy rating on September 3. This represents a simple average rating of 4.00. However, the performance-weighted average is lower at 2.77, indicating that recent analyst predictions have not aligned well with actual returns.

The fundamental diagnostic score for Verisk Analytics is 1.14 (out of 10), suggesting weak fundamentals. Key factors include:

• Equity multiplier: 15.38%, with an internal diagnostic score of 1.34—indicating high financial leverage and potential risk.
• Operating revenue (YoY growth rate): 7.38%, with a score of 2.58, suggesting modest growth.
• Cost of sales ratio: 30.17%, scoring 1.63—highlighting concerns over operating efficiency.
• Net profit / Total profit: 77.78%, with a score of 1.05, indicating high profitability but still flagged as a weaker signal in the model.

These fundamentals are in contrast to the positive fund-flow data (see below) and the recent price trend, which is up 0.13%. The mismatch between fundamentals and price behavior suggests investors may be optimistic about future developments or discounting current financials.

Money-Flow Trends

Verisk Analytics has experienced a recent surge in positive fund flows. The fund flow score is 7.62 (out of 10), which is categorized as good. All categories of fund inflows—from small to extra-large—show inflow ratios above 50%. Notably:

• Overall inflow ratio: 52.39%
• Block (large institutional) inflow ratio: 52.61%

This suggests strong interest from both retail and institutional investors, indicating confidence in VRSK despite weak fundamentals and bearish technical signals.

Key Technical Signals

The technical indicators for Verisk Analytics are overwhelmingly bearish. The technical score is 2.19 (out of 10), with 4 bearish indicators and 0 bullish. Here’s a breakdown of the internal diagnostic scores (0-10):

• WR Overbought: Score 2.26 — suggesting overvaluation risks
• WR Oversold: Score 3.4 — neutral but not bullish enough to override bearish patterns
• Bearish Engulfing: Score 2.1 — a strong bearish reversal pattern
• Marubozu White: Score 1 — a very bearish candlestick indicating strong selling pressure

In the last five days, the key chart patterns included:

• September 8: WR Overbought signal (bearish)
• September 2: Bearish Engulfing and WR Oversold (mixed but bearish bias)
• September 3: Marubozu White (bearish)

The overall technical trend is weak, with a strong risk of price decline. Investors are advised to avoid VRSK at this time due to the lack of bullish momentum and the dominance of bearish signals.

Conclusion

Verisk Analytics is currently in a difficult position, with weak fundamentals, bearish technical signals, and mixed analyst ratings. While fund flows remain positive, the technical indicators suggest caution. Investors should consider waiting for a pull-back or clearer signs of reversal before entering a long position in VRSK.