Verisk Q1 2025 Earnings Preview: Growth Amid Crosscurrents

Verisk Analytics (VRSK) is set to report its first-quarter fiscal 2025 earnings on May 7, a critical juncture for investors assessing whether the data analytics leader can sustain its growth trajectory amid shifting market dynamics. Analysts project $749.75 million in revenue, a 6.7% year-over-year rise, while adjusted EPS is expected to grow 3.3% to $1.68. However, the path to these figures has grown murkier in recent months, as downward revisions to estimates and a cautious outlook from the Zacks model suggest execution risks are mounting.

Earnings Outlook: A Slower Climb

Verisk’s Q1 revenue growth is expected to decelerate from the 8.6% YoY expansion recorded in Q1 2024, reflecting a broader softening in the data analytics sector. Regional performance will be a key focus:
- U.S. Revenue: Projected to rise 5.4% to $612.4 million, with insurers’ demand for risk modeling and claims solutions remaining steady.
- International Growth: The 13.5% surge in non-U.S./U.K. revenue to $80.6 million could be a bright spot, as Verisk expands its climate resilience and underwriting tools in emerging markets.

The EPS forecast, however, hinges on margin expansion. Analysts attribute the 3.3% growth to operational efficiencies, though the Zacks Earnings ESP of -2.34%—suggesting a 2.34% likelihood of missing estimates—contrasts sharply with Verisk’s recent track record of outperforming. Over the past four quarters, the company beat EPS estimates by an average of 4.8%, a streak that could now be under threat.

Why the Skepticism?

The Zacks model’s caution stems from two factors:
1. Estimate Revisions: EPS projections have been trimmed from $1.73 to $1.68 over the past 90 days, signaling tempered optimism about pricing power and cost management.
2. Guidance Overhang: After Q4 2024 results, Verisk issued fiscal 2025 guidance ($3.0–3.1 billion in revenue, $6.80–7.10 EPS) that fell short of analyst expectations, sparking a 3.9% stock decline despite beating Q4 estimates.

Analysts now project full-year 2025 EPS of $7.01, a 5.6% increase, with hopes of stronger momentum in 2026 (projected $7.79, or 11.1% growth). Yet, near-term risks loom large.

Key Drivers and Risks

Growth Catalysts:
- Global Expansion: Verisk’s push into climate risk modeling and catastrophe analytics aligns with rising demand from insurers and governments.
- Value-Based Pricing: Contracts tied to outcomes, such as reduced claims costs, could drive recurring revenue.

Headwinds:
- Margin Pressures: Input cost inflation and competitive pricing in core insurance markets may squeeze margins.
- Macroeconomic Uncertainty: A slowdown in global insurance spending—a key revenue driver—could dampen results.

Peer Performance and Market Context

Verisk operates in a sector where growth is uneven. Peers like CoStar (a 11.5% revenue grower in Q1) and Dun & Bradstreet (2.7% growth) highlight the variability in data analytics demand. Meanwhile, Verisk’s stock has risen 6% over the past month, slightly underperforming the sector’s 11.2% gain.

Analysts’ price targets range from $230 to $325, with an average of $294, reflecting divided sentiment. Barclays recently downgraded the stock to Equal-Weight, citing valuation concerns, while others remain neutral.

What to Watch for on Earnings Day

• Revenue by Region: Confirm whether international growth offsets a sluggish U.S. market.
• Margin Trends: Any signs of margin compression could spook investors.
• 2025 Guidance: Management’s updated outlook will be critical. A midpoint raise from the current $6.95 EPS estimate would likely boost confidence.

Conclusion: A Crossroads for Verisk

Verisk’s Q1 results will test whether its global expansion and margin discipline can offset macroeconomic and competitive headwinds. With the stock trading near its average analyst target ($294.75 vs. $294.02), investors are neither overly bullish nor bearish—yet.

The company’s history of outperforming estimates offers hope, but the Zacks model’s caution underscores a new layer of uncertainty. A beat on EPS and a robust 2025 guidance revision could reaccelerate the stock, while a miss might invite deeper scrutiny of its long-term growth narrative.

In a sector where execution is everything, Verisk’s Q1 report is its chance to prove it can navigate crosscurrents—and position itself as a durable winner in data-driven analytics.