Verisk Analytics (VRSK): Why the Sell Rating is Misleading and Why Long-Term Investors Should Stay Bullish

In October 2025, Rothschild Redburn downgraded Verisk Analytics (NASDAQ: VRSK) to a Sell rating, citing concerns over slowing growth, valuation multiples, and competitive pressures from AI-native rivals Rothschild Redburn downgrade. While the bearish call has rattled investors-contributing to a 16.25% decline in the stock over six months-the fundamentals tell a different story. For contrarian value investors, this sell-off represents an opportunity to capitalize on a company with resilient earnings, stable revenue growth, and a defensible market position in the insurance data analytics sector.

Earnings Resilience: A Contrarian's Best Friend

Verisk has consistently outperformed expectations in recent quarters. For Q2 2025, the company reported earnings per share (EPS) of $1.88, surpassing the consensus estimate of $1.78, according to Stocks Telegraph. Over the past four quarters, Verisk has beaten EPS forecasts in all four periods, demonstrating operational discipline, per Yahoo Finance. Analysts project Q3 2025 EPS at $1.69, a 1.2% year-over-year increase, per Nasdaq. This resilience is critical for long-term investors, as it underscores Verisk's ability to maintain profitability amid industry normalization.

The company's revenue growth, while decelerating from pandemic-era highs, remains robust. Q2 2025 revenue reached $773 million, a 7.8% year-over-year increase (reported by Yahoo Finance). For the September 2025 quarter, revenue is expected to hit $774.65 million, up 6.8% from the same period in 2024 (per Nasdaq). These figures suggest that Verisk's core insurance data and analytics business remains sticky, even as pricing cycles normalize.

Valuation Metrics: Not as Expensive as They Seem

Critics argue that Verisk's P/E ratio of 34.47 as of October 2025, according to Macrotrends, and elevated EBITDA multiples make it overvalued relative to peers. However, a closer look at industry averages reveals a more nuanced picture. For instance, WTW trades at a P/E of 226.32, while Old Republic (ORI) has a P/E of 11.9. Verisk's P/E, while higher than the Industrials sector average of 27.08 per FullRatio, is far more conservative than some of its peers.

Debt metrics also warrant scrutiny. Verisk's long-term debt rose to $3.233 billion in Q2 2025, according to Macrotrends long-term debt, but this increase is largely tied to strategic acquisitions and inorganic growth. By comparison, WTW maintains a debt-to-equity ratio of 0.73 (reported by the WTW piece), while ORI's ratio is a mere 0.26 (reported by the Old Republic piece). Verisk's leverage, though higher, is manageable given its strong cash flow generation and recurring revenue model.

Strategic Innovations: Future-Proofing the Business

Verisk's recent foray into AI-driven solutions signals a proactive response to competitive threats. The launch of XactAI, a suite of tools automating claims processing (covered in the Rothschild Redburn piece), and a partnership with Jopari Solutions to enhance medical record reviews (also noted in that report), demonstrate the company's commitment to innovation. These moves not only address efficiency gaps but also position Verisk to capture incremental revenue from AI adoption in the insurance sector.

Leadership changes further reinforce this trajectory. Saurabh Khemka's appointment as president of Underwriting Solutions was highlighted in the Rothschild Redburn coverage and underscores the company's focus on expanding its offerings in a critical growth area. For investors, these strategic shifts suggest Verisk is not merely defending its market share but actively evolving to meet future demand.

The Contrarian Case: Buy the Dip, Not the Hype

The sell rating from Rothschild Redburn is rooted in short-term concerns about margin compression and AI competition. However, these risks are already priced into the stock, which has fallen 24.5% from its 52-week high, according to Stocks Telegraph. For long-term investors, this volatility creates an entry point to access a company with a durable business model and a history of outperforming.

Seaport Global Securities and RBC Capital's "Buy" and "Outperform" ratings (noted in the Rothschild Redburn coverage), respectively, underscore the market's divided sentiment. Contrarian value investors should focus on Verisk's earnings resilience, stable revenue growth, and strategic AI investments-factors that suggest the sell-off is overdone.

Conclusion

Verisk Analytics' recent downgrade is a classic case of short-term pessimism overshadowing long-term fundamentals. While the company faces valid challenges, its earnings consistency, defensible valuation, and innovation-driven strategy make it a compelling buy for investors with a multi-year horizon. As the insurance industry navigates normalization, Verisk's data-driven edge will likely prove its worth-making the current sell-off a golden opportunity for the contrarian.