Is VRSK Worth Buying as Recurring Revenue Battles a Premium Valuation?

VRSK Builds on a Subscription-Led Revenue Base

Subscription revenues represented 83% of second-quarter 2026 revenues, up from 82% a year earlier, and grew 8% on an organic constant-currency basis. The mix strengthens predictability because subscription fees are generally paid in advance, while renewal pricing is supported by product and data enhancements.

Deferred revenues rose to $573.9 million at June 30, 2026, from $444.2 million at the end of 2025. That increase, along with annual price increases tied to enhancements in forms, rules and loss-cost services, gives Verisk a firmer base for revenue visibility.

Verisk Couples Growth With Strong Cash Generation

Second-quarter revenues increased 4.3% year over year to $806.3 million, while adjusted earnings rose 5.3% to $1.98 per share. Adjusted EBITDA climbed 4.2% to $463.6 million, with the margin at 57.5%, underscoring continued operating discipline.

Verisk Analytics, Inc. Revenue (Quarterly)

Verisk Analytics, Inc. EPS Diluted (Quarterly)

Cash conversion was a bigger positive. Operating cash flow jumped 49.7% to $366 million and free cash flow advanced 57.9% to $297.9 million. That capacity supports investment in software, artificial intelligence and scalable technology while funding dividends and share repurchases.

VRSK Still Commands a Valuation Premium

VRSK trades at 21.7X forward 12-month earnings, above the Zacks sub-industry average of 18.8X and the Zacks sector average of 18.1X. The premium means investors are already paying for a meaningful measure of business quality and recurring-revenue resilience.

The multiple is less demanding relative to Verisk’s own history. Its five-year median is 35.6X, with the range spanning 19.6X to 43.5X. Even so, a valuation above current peer benchmarks leaves less room for disappointment if growth or margins soften.

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Verisk Faces Higher Debt and Margin Pressures

Total debt stood at $4.47 billion at June 30, 2026, including $4.22 billion of long-term debt and $257.7 million of short-term debt. Net interest expense rose to $52.8 million in the second quarter from $35.5 million a year earlier, increasing the cost of carrying that leverage.

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Cost pressure is another offset. Cost of revenues increased 1.7% year over year, partly on higher personnel, benefits and information-technology expenses, while selling, general and administrative expenses rose 20.8% on legal fees, advisory costs and acquisition-related expenses.

VRSK Signals Favor Selectivity Over Aggression

The operating backdrop supports patience rather than an aggressive entry. Guidewire Software, Inc. GWRE also serves property and casualty insurers with core software and analytics, while CCC Intelligent Solutions Holdings Inc. CCC uses cloud, data and artificial intelligence across insurance claims and repair workflows. Those peers highlight the broader push toward embedded insurance technology and automation.

VRSK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

VRSK carries a VGM Score of B, Growth Score of B, Momentum Score of B and Value Score of C. A #3 rank can support holding a stock, while the B scores point to favorable growth and momentum characteristics. The Value Score of C is more neutral, fitting a stock with solid operating quality but a valuation that still warrants selectivity.

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This article originally published on Zacks Investment Research (zacks.com).

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